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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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I received only a 1099-A from Bank of America for the

Customer Question

I received only a 1099-A from Bank of America for the foreclosure of my house in July 2015. It was my primary residence, a non recourse loan and in Arizona, a non recourse state. So with the extended debt forgiveness act, I shouldn't owe any tax on the debt. BUT, I cannot figure out what or how to report anything to the IRS so they do not claim that I didn't follow their rules.
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: Nothe at the moment.
Submitted: 2 months ago.
Category: Tax
Expert:  emc011075 replied 2 months ago.

Hi. My name is ***** ***** I will be happy to help you.

1099A is NOT cancellation of debt notice. It is Acquisition or Abandonment of property, basically change of ownership notice (from you to the bank). Most of the time you do not have to worry about 1099A in case of foreclosure of the primary residence. It is suppose to help you to calculate your capital gains/losses from the sale/disposition of the property.

To report cancellation of debt, the banks use different form: 1099C. The principal residence debt forgiveness act was only extended until end of 2014. If the bank cancel your debt in 2016 or 2017, you may need to report it as income, unless you can claim insolvency.

Expert:  emc011075 replied 2 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Customer: replied 2 months ago.
Thank you for your reply, however it does not accurately or completely answer my question. First, the mortgage debt forgiveness act WAS extended through 2015. Second, you mentioned calculating capital gains or losses, but didn't explain what that means re filing my tax return. You don't need to reply to this. Goodbye.
Expert:  emc011075 replied 2 months ago.

I do not know where are you getting your information from but this is the latest and only IRS update:

https://www.irs.gov/uac/home-foreclosure-and-debt-cancellation

and here's link to the congress website:

https://www.congress.gov/bill/114th-congress/house-bill/1002

It had been introduced but have not passed as of today.

If you property is foreclosed, you will most likely not have any capital gains, you will have capital losses. Losses from sale of principal residence are not deductible, no need to report anything.

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