Hi and welcome to our site!If the property is disposed in foreclosure - that transaction is reported as the sale.In general - we need to use the fair market value as a sale priceIf that a non recourse loan - we need to use the amount of the loan outstanding as a sale price.
Thank you. So loan outstanding is sale price and how do I reflect it was upside down in terms of the FMV or is this necessary in a non recourse loan?
That doesn't matter for your reporting.You need to know two items - selling price and the basis.
If that was a non recourse loan - there is no COD income - and form 982 is not needed. However it is assumed that the property is sold for the amount of the debt outstanding - and we need to use the amount as a sale price.
I got a 1099a. How do I report it or do I need to?
Is it 4797 I do not need?
The form 1099A reports the fact of the disposition. Which state are you located?
You need to report the disposition of rental property on form 4797.
California is where the property was located but the taxes will be filed in NC
As I know California is a non recourse state - and you should not expect form 1099C.
A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.See - http://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellationquestion 3. I lost my home through foreclosure. Are there tax consequences? step 2 - item 4. Enter the fair market value of the property foreclosed. For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure ________
In cases of bankruptcy it does, correct? it was Ch 7
Yes - that page addresses situation directly related to foreclosure - regardless if it is under the bankruptcy procedure or not. We still need to report the disposition of the property.The difference in reporting is based only if that is a recourse or non recourse loan.
Is the HELOC a non recourse and the regular loan a recourse, and do I report the Helopfc for which I did not get a 1099?
For the recourse loan - you should receive 1099C - do you have it?
No a 1099a not a 1099c
If from 1099c was not issued - and you are not responsible for teh balance outstanding - most likely that is a non recorse loan.Form 1099A reports teh fact of teh disposion - it doesn;t tell anything about the debt - if you are still responsible or the debt was discharged.