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1099 C box 7 is zero. It was a short sale. box 7 requires

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1099 C box 7 is...
1099 C box 7 is zero. It was a short sale. box 7 requires market value if foreclosed or abondoned. As such, is zero correct?
Submitted: 5 years ago.Category: Tax
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10/2/2012
Tax Professional: R. Klein, EA, Enrolled Agent replied 5 years ago
R. Klein, EA
R. Klein, EA, Enrolled Agent
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Randalltax :

As noted, Box 7 is NOT used for a short sale. This is because all of the numbers in the transaction are known at the time of sale. The shortage amount is a specific number.

Randalltax :

In an abandonment or repo, the value of the house or the loss is less definite because there was not a sale transaction. Therefore this information is needed to determine gain or loss.

Randalltax :

Remember that the amount short on this transaction is considered taxable income UNLESS you meet one of the exceptions, such as you filed bankruptcy, this was your primary residence and it was "underwater" due to property value decrease, or you were insolvent on the day of the transaction.

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