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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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how do i calculate the amount oftaxes i owe from a 1099-a form

Resolved Question:

how do i calculate the amount oftaxes i owe from a 1099-a form i got from a forclosure investment property if box #2 is 349,639 and box 4 is 381,355 ?
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

Dear approval,

 

Thank you for your question.

 

Can you tell me what kind of investment property? as it a rental unit?

Customer: replied 8 years ago.
yes a single family rental prop.
Expert:  Ed Johnson replied 8 years ago.

Dear approval,

 

Thanks for getting back to me.

 

When box 4 is greater than box 2, there is no debt cancellation income, and you should not get a 1099C.

 

So you treate this as a sale useing form 4797:

 

http://www.irs.gov/pub/irs-pdf/i4797.pdf

 

http://www.irs.gov/pub/irs-pdf/f4797.pdf

 

the capitgal gains forumal represented by the form is:

 

Capital gains = FMV- (original cost of property + improvements, + major repairs - accumulated depreciation). the capital gains are taxed at 15%.

 

The accumulated depreciation is recaptured at 25%.

 

If you want to estimate this all, use the following calculator:

http://www.realestate-calc.com/Real_Estate_Tax_Calculator_I2.asp

 

 

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