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Hi and welcome to our site!The form 1099A reports the fact of disposition of the property. It doesn't tell anything if the debt is forgiven or not. If the debt is forgiven - a taxpayer should receive form 1099C - and then - you will use form 982 to exclude forgiven debt from taxable income. If the form 1099C was not received - I suggest to contact a creditor or order a transcript from the IRS to verify - normally the form 1099C for 2012 should be received in January 2013.
No 1099C has been received, therefore should we not report this transaction?
According to IRS publication 523 - see page 19 - http://www.irs.gov/pub/irs-pdf/p523.pdfDo not report the 2012 sale of your main home on your tax return unless:You have a gain and do not qualify to exclude all of it,You have a gain and choose not to exclude it, orYou received Form 1099-S.So if that was a primary residence - most likely the sale transaction would not need to be reported.