We had a rental property that was foreclosed July 2009 and have received 1099-c. The debt cancelled was 179,000 and FMV was 193,500. The property was foreclosed due to my husband's loss of income due to disability and the mortgage pmt on the rental property went up that we ended up not being able to afford the mortgage even with the prop being rented. I have always prepared our taxes and this is the first time with 1099-c. I know we have insolvency but im not quite confident in filing the form 982.My question is do i need to go to a cpa or can i just do this myself?
Hmm. You're asking professionals whether to hire a professional in this situation. What do you think we would answer? Seriously, that's why we're here: any time you have a tax return that has more to it than wages, mortgage interest, deductible taxes, charitable, and a little investment income, you'll sleep a lot better having a pro do it for you. And the foreclosure stuff is really complicated. Right now, it may be difficult to find one of us with "free" time before the
15th, so you may want to file an extension (federal and state, though for many states it's automatic if you don't have to pay), and choose a pro to help you through this later.
Tom makes an excellent point - though I would argue that I'm never free, just reasonably priced .
I'm sure there may be one of us out there, but frankly, at this date I'd be suspicious about any tax pro who could fit you in at this late date. I don't have room for my regulars who procrastinated, much less a one-timer. It may suck to hear that but keep in mind when you call around that you're not a regular client of any pro and every pro will know that you likely won't come back.
This is NOT going to endear you to any of us. It doesn't mean we won't work with you, just that you aren't like to get squeezed in for anything much more than an extension (which most of will want to be paid for up front in case you decide NOT to come back) and you aren't likely to get much of a break on the bill - I discount returns all the time for regulars who've experienced financial problems or for certain groups I support (LEOs, Military, single parents, First Responders and such) but I almost never discount for a new client the first year (though I do mention that discounts may be available in subsequent years).
I'd recommend you start with
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- the National Association of Enrolled Agents. Their web site includes a Find-A-Pro link. Make some calls, find a pro, get an extension and expect to pay - a 1040 with a foreclosed rental in our office would run you around $750 depending on what else you have (maybe MORE). This may sound high but it is NOTHING compared to paying tax on close to $200K if you don't have to. And even if you don't pay any tax, you still have to adjust the basis of your remaining assets for the loss written off.
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