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Ask Merlo Your Own Question
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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How to get a 1099-C from foreclosure?

Customer Question

I never got a 1099-c from foreclosure, but the lender sent one to IRS. The foreclosed double wide was resold but I do not have the amount that it sold for. IRS contacted me and wants to show the whole amount of the cancellation of debt as income, but with no info on the amount that it sold for that should be credited to the amount that the IRS says that I owe as income. How do I obtain the info turned in on the 1099-c in order to have the corrected or adjusted with the IRS?

Submitted: 9 years ago.
Category: Tax
Expert:  Merlo replied 9 years ago.

You have indicated that the IRS has already contacted you and that they have received a copy of the 1099-C. Did you ask them to send you a copy or did you ask them for the information from that form? Also, have you tried contacting the credit company that was responsible for filing the Form 1099-C?

Customer: replied 9 years ago.
NO I have not contacted the IRS as I don't have a number to talk to a person. I have lost all my info on the lender due to several moves and I only have an address from the IRS letter but no contact number for lender and my reply date is by June 11, 2008 to the IRS.
Expert:  Merlo replied 9 years ago.

The quickest way for you to obtain a copy of the 1099-C form would be through the creditor, if you can possibly find a way to retrieve information on who that company was. Your only other alternative is to contact the IRS either by mail or phone, and that would probably take longer than the deadline date you have of June 11th.

However, I am curious as to what the IRS is showing that you owe tax on. If you had a foreclosure in a previous tax year but did not report the cancellation of debt, and now the IRS has a 1099-C form from the lender, then the only amount the IRS should be showing as taxable would be the amount of debt that was forgiven as listed on the 1099-C. Is this what they are saying you owe tax on?

Customer: replied 9 years ago.
The IRS info that I have shows ccancellation of debt....$3,721 (under...Shown on return
then.. $28,638 (under...Reported to IRS, or as Corrected)
Then $24,917 (under...Difference)
The way I am understanding this is that the lender is saying that they sold the doublewide for $3,721 and I owe taxes on the remainder of $24, do I find out what they actually sold the doublewide for?
Expert:  Merlo replied 9 years ago.

First of all, it sounds like the IRS is saying that on the original tax return which you submitted, that you showed a cancellation of debt in the amount of $3,721, but that the amount reported to them as cancellation of debt was actually $28,638, meaning you would owe tax on the difference of $24,917. I am not certain where the figure of $3,721 came from that you apparently listed on your original tax return, but that sounds like what the IRS is saying.

In any case, obtaining a copy of the 1099-C would not give you the sale price of the mobile home. It would only show you the amount of debt that was cancelled, and at this point it sounds like the IRS is saying that this was reported to them as being $28,638. Again, your best alternative is to try and contact the lending institution who was involved in this foreclosure to obtain full details on the sale of this property. You might check with your local county recorder of deeds to see if this information would be a part of their records. That is where I would recommend starting. If they do not have the information you need, then again you need to contact the IRS (although I know it is sometimes very difficult to get through).