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I owned a house in NJ. The house was forclosed on. I recieved

a form 2008 1999-A Acquition...
I owned a house in NJ. The house was forclosed on. I recieved a form 2008
1999-A Acquition or Abandoment of Secured property.
#2 Balance of principal outstanding $ 845,522.56
#4 Fair market value as $100.

How can a mortague company legally say the house is only worth $100?
IRS said if I can prove that I did not recieve cash this debt can be relieved.
What documentation do I need so this be debt be relieved?
What recorse do I have?
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Answered in 4 minutes by:
6/1/2010
Ellen
Ellen, Tax Attorney
Category: Tax
Satisfied Customers: 36,715
Experience: 25 years of experience helping people like you.
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was the house your primary residence
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Customer reply replied 7 years ago

Yes it was my primary residence.

Hello,

I am the JustAnswer expert that will be helping you today. I am a lawyer with 25 years experience. Although I am not your attorney, I hope that I can give you helpful legal information.

It does not appear that you would be subject to taxation on the relief of indebtedness income. Although typically if the lender accepts less than what you owe on the full balance, this difference will become discharge of indebtedness income and it is taxed as “ordinary income” (See 26 U.S.C. § 61 and §§ 1001 through 1016).However The Mortgage Forgiveness Debt Relief Act of 2007 excludes from taxation discharges of up to $2 million of indebtedness that is secured by a principal residence and is incurred in the acquisition, construction or substantial improvement of the principal residence.
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Customer reply replied 7 years ago
Yes I am aware as I said the irs agent said it could be forgiven. What I need to know is what forms ,documentation, prossess needs to be done to achieve that.
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Customer reply replied 7 years ago
Relist: Incomplete answer.
I asked what I needed to do to get to know the forms, process, and documentation to get the tax debt relieved. The lawyer only gave me the name of the statue not the proccess as asked for.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,244
Experience: 15years with H & R Block. Divisional leader, Instructor
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HelloCustomer

To request that your forgiveness of debt on your primary home be excluded from income you need to use Form 982 with your tax return. Do not include the forgiveness amount on your 1040 form.

If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b,if applicable,on Form 982.

 

Here ia a link to teh 982 Form that you can fill in and print or just print and enter by hand your indformation,

I sincerely XXXXX XXXXX will give you the information you need,

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Customer reply replied 7 years ago

1.) The link did not show up could you resend the link.

 

2.) Does it matter that the fair market vale for a $895,00 home is listed at only $ 100?

TSince there is no way the fair market value is only $ 100

 

3) What verbadge do I need to say to IRS agent to get a second extension so as to get futher professional tax help, since I have realized that my efforts to do so have not prevailed.

 

You were much more helpfull than the other expert.

Thank you in advance.

Sorry about the link (and the spelling)

http://www.irs.gov/pub/irs-pdf/f982.pdf

 

The fair market value could be a typo, request a correction from the issuer of the 1099.

 

As far as an additional extension, you have until October 15th 2010 if you filed for an extension.

 

What you need to know is that if this was your personal residence you still have the $250000 exclusion if you lived in home for 2 out of the last 5 years that you owned it ($500,000 if you are married). This means that the Form 982 will take over for any amount of gain after your regular exclusion.

 

If you need tax help, any of the tax offices like H & R Block should be able to help you (for a price). There were so many of these for this past tax year that the people still working in the tax offices now should be well versed in how to handle this for you. Usually, only tax preparers that have a number of years experience are around after April 15th in the tax prep offices due to the complexity of the items you see after April 15th. Even though you have an extension till Oct 15th don't wait. There is nothing you could say after that date that would get you any more time.

Robin D.
Robin D., Senior Tax Advisor 4
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Satisfied Customers: 16,244
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