Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I received a 1099c from a mortgage lender not sure how to…

Customer Question
I received a 1099c...

I received a 1099c from a mortgage lender not sure how to handle

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

The house was foreclosed on 2 years prior to this form

Submitted: 8 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 1 minute by:
12/9/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,795
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified

Hello. Happy Holidays!! Thank you for choosing this Q&A service for assistance. My name is***** am reading over your inquiry and will prep my response shortly.

Ask Your Own Tax Question
Customer reply replied 8 months ago
Thanks
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago

It is not uncommon to receive a Form 1099-C a year, two years, or more after a debt has been charged off. Unless you meet an exception to exclude the cancelled debt amount from your income, it is taxable income. Note that the IRS receives a copy of the 1099-C as well, so you have to report it. Listed below are the exceptions that allow taxpayers to exclude the cancelled debt amount as income.

-----------------------------------------------

EXCEPTIONS to Cancellation of Debt Income:

  1. Amounts canceled as gifts, bequests, devises, or inheritances
  2. Certain qualified student loans canceled under the loan provisions that the loans would be canceled if you work for a certain period of time in certain professions for a broad class of employers
  3. Amounts of canceled debt that would be deductible if you, as a cash basis taxpayer, paid it
  4. A qualified purchase price reduction given by the seller of property to the buyer
  5. Any Pay-for-Performance Success Payments that reduce the principal balance of your home mortgage under the Home Affordable Modification Program

Amounts that meet the requirements for any of the following exclusions aren't included in income, even though they're cancellation of debt income.

EXCLUSIONS from Gross Income:

  1. Debt canceled in a Title 11 bankruptcy case
  2. Debt canceled during insolvency
  3. Cancellation of qualified farm indebtedness
  4. Cancellation of qualified real property business indebtedness
  5. Cancellation of qualified principal residence indebtedness

REFERENCE SOURCE:

https://www.irs.gov/taxtopics/tc431

Still typing....

Ask Your Own Tax Question
Customer reply replied 8 months ago
What would I have to do for insolvency?
Customer reply replied 8 months ago
or #5
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago

Now, if you meet an exception of exclusion, you would complete the Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).

Again, if you do not meet an exception or exclusion the amount shown on the 1099-C is taxable income to you.

Ask Your Own Tax Question
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago

Link to Form 982:

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

--------------------------------------------------------------

In closing, my goal is to provide you with the best experience possible! Hopefully, the service that I have provided has earned a 5-star rating! Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave today. Thank you in advance. If you require further assistance, use the reply box and let me know.

Ask Your Own Tax Question
Customer reply replied 8 months ago
is this the same for #5
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago

Yes, it is. Yo would use the Form 982 for either of the exceptions or exclusions.

Ask Your Own Tax Question
Customer reply replied 8 months ago
ty
Tax Professional: Tax.appeal.168, Tax Accountant replied 8 months ago

You are very welcome. Please remember to positively rate my response (3 or more stars) so that I can receive credit for assisting you. Thank you in advance.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,795
4,795 Satisfied Customers
Experience: 3+ decades of varied tax industry exp. Tax Biz owner

Tax.appeal.168 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I have a client whose rental property was foreclosed on. He
I have a client whose rental property was foreclosed on. He received a 1099A, box checked that he was personally liable. Called the bank and client was told there was a $0 balance and doesn't owe anyt… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My home is about to be foreclosed on. If the home is sold at
My home is about to be foreclosed on. If the home is sold at auction and does not sell for what is owed will I be liable for balance … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I haven't filed personal taxes since 2012 nor has my
I haven't filed personal taxes since 2012 nor has my husband. I do not have my w2s for all years. I want to get my taxes current and need to know how to get everything I need to do taxes. In 2012 my h… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Mortgage company has discharged a debt of $82,561.68 of a foreclosed
Mortgage company has discharged a debt of $82,561.68 of a foreclosed property 8 years ago. I have been sent a 1099c asking this to be filed with my taxes. will l owe any tax on this write off by the m… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I owned a home in Michigan as an investment property. I live
I owned a home in Michigan as an investment property. I live in Florida. In September, 2013 the bank foreclosed on the loan and the property was eventually sold by the bank in November 2014 (although … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
My sister's house was foreclosed on and sold. She received
My sister's house was foreclosed on and sold. She received Irs form 1099 with the price of the house which was $189,000.00 and was sold for $120,000.00 there is a balance of $69,000.00. Is she respons… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
My ex-wife and I sold our joint owned home in December of 2013
My ex-wife and I sold our joint owned home in December of 2013 in a short sale. We have both received a 1099S with the sale but, have not received a 1099C, yet? I have received from the lender and the… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
In 2011, our house was foreclosed on. We had a 2nd mortgage
In 2011, our house was foreclosed on. We had a 2nd mortgage on the house at the time, and at the time of foreclosure we were insolvant. In December 2013, we settled the 2nd mortgage by paying back 32%… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Hello, since federal mortgage forgiveness act has not been
Hello, since federal mortgage forgiveness act has not been extended The situation in Portland, Oregon. Husband and wife purchase their primary residence in 2005, with 1st mortgage, after purchase took… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I received a 1099-C from USAA for tax year 2012. My house is
I received a 1099-C from USAA for tax year 2012. My house is now in escrow and the title company instructed me to ask USAA to record a reconveyance and provide proof (a letter) stating the reconveyanc… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
This is a Virginia and federal tax question. I live in Virginia. My
This is a Virginia and federal tax question. I live in Virginia. My wife's declared Chapter 7 Bankruptcy and was discharged in December of last year , 2011. She cited only two debts namely her first a… read more
Jax Tax
Jax Tax
Senior Tax Attorney
Master's Degree
1,363 satisfied customers
I owned rental property that had been fully depreciated. I
I owned rental property that had been fully depreciated. I took out a second mortgage on it and eventually defaulted on the loan. The property was forclosed and I received a 1099-A. The Market value o… read more
Shawn P. Adamo
Shawn P. Adamo
CEO
Bachelor's Degree
18 satisfied customers
i bought a second house in 2007, and tried to sell the first
i bought a second house in 2007, and tried to sell the first one but did not succeed. So i put it on rent, tried to work it out for 3 years but lot of financial burden forced me to file bankruptcy (ch… read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
I received a form 1099-C cancellation of debt We purchased
I received a form 1099-C "cancellation of debt" We purchased a house in AZ 8 years ago an refinanced it 2 years ago. We originally purchased the house for $204,000 and refinanced it for $360,000. (We … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I have a client whose house was foreclosed in 2009. He
I have a client whose house was foreclosed in 2009. He received a 1099C cancellation of debt. box 5 on that form says that it was nonrecourse loan. But 1099A box 5 says that borrower was personally li… read more
MM
MM
Manager
Juris Doctor
14 satisfied customers
We lost our home to non-judicial foreclosure by the holder
We lost our home to "non-judicial foreclosure" by the holder of our first, yet smaller mortgage. The holder of the 2nd mortgage through a mutually agreed upon transaction, bought the property from the… read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
I abandoned Stockton house in January 2008. The mortgage company
I abandoned Stockton house in January 2008. The mortgage company sent me financial information Pkgs to complete and i sent it back. This happened 3 times. But no response to my deed in lieu of foreclo… read more
Marvin,EA
Marvin,EA
Enrolled Agent
Bachelor's Degree
1,605 satisfied customers
I received a form 1099-A, abandonment or aquisition of property.
I received a form 1099-A, abandonment or aquisition of property. The date in box 1 is 04/29/08. The amount in box 2 is $13,235.20. The amount in box 4 is $48,500.00. What does all this mean? Will I li… read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x