Got both 1099-c and 1099-a from Fannie Mae for mortgage debt cancellation on my foreclosed primary ca home, same Date but different FMV listed. What to list as FMV on p4681 Foreclosure worksheet (Table 1-1)?
Got both 1099-c and 1099-a from Fannie Mae for mortgage debt cancellation on my foreclosed primary ca home, same Date but different FMV listed. What to list as FMV on p4681 Foreclosure worksheet (Table 1-1)?
Got both a 1099-c and 1099-a from Fannie Mae for mortgage on my foreclosed primary ca home, $278k is the outstanding principle/debt cancellation. Both have same Date but different FMV (fair market value) listed. $0 FMV on 1099-c (maybe cuz they didn't sell home yet), but $320k FMV on 1099-a.
1.) under Table 1-1 Worksheet for Foreclosures and Repossessions for p4681, which FMV do i put for question "2.) Enter the fair market value of the transferred property"? $0 as what the 1099-C lists, or $320k which is what is listed in the 1099-A?
2.) also, under Table 1-1 Worksheet for Foreclosures and Repossessions for p4681, question "7.) Enter the adjusted basis of the transferred property", what amount do i enter here in this situation (and let's just say no improvements or depreciation claimed)?
primary ca home, $278k is the outstanding principle/debt cancellation. Both have same Date but different FMV (fair market value) listed. $0 FMV on 1099-c (maybe cuz they didn't sell home yet), but $320k FMV on 1099-a.
which FMV do i put for question "2.) Enter the fair market value of the transferred property"? $0 as what the 1099-C lists, or $320k which is what is listed in the 1099-A?
p4681, question "7.) Enter the adjusted basis of the transferred property", what amount do i enter here in this situation (and let's just say no improvements or depreciation claimed)?
Depending on timing, the lender could have put the foreclosue information (1099-A) on the 1099-C. It is not unusual to get both. The
1099-A has the foreclosure information you need. Disregard the FMV of zero on the 1099-C.
You state that the FMV is $320K and the outstanding debt was $278K. Line 1 and 2 would have $278K and $320K respectively. Line 3 is zero. As such, there is no ordinary income from cancelled debt. You can only have cancelled debt income if the FMV is less than the outstanding debt.
Line 4 is $278K. Line 5 only has a value if you actually received anything from the foreclosure sale. Line 6 is the amount realized on the disposition. This is the amount that will be used on Form 8949 as the proceeds. Line 7 is your cost basis in the property. Using your assumption in your post, it is the purchase price plus the closing costs excluding any cost that you deducted on your tax return (e.g., property taxes and mortgage interest paid at closing). Line 8 is your gain or loss. If it is a loss, you can not deduct a loss on personal use property on Form 8949. You would need to report the disposition on the
8949 as the IRS only has the data from the 1099s. You would need to adjust the loss on the 8949 to make it zero.
If there is a gain on the 8949 and you are eligible to exclude the gain because you meet the 2 year ownership and use test for a primary residence, then you make that adjustment on the 8949 to arrive at no gain.
For both a gain or a loss you must also enter the proper code on the
8949 for the adjustments you are making. Code H is used to exclude gain on a main home. Code L is used to eliminate a loss on personal use property.
See the instructions for both Schedule D and Form 8949.
primary ca home, $278k is the outstanding principle/debt cancellation. Both have same Date but different FMV (fair market value) listed. $0 FMV on 1099-c (maybe cuz they didn't sell home yet), but $320k FMV on 1099-a.
which FMV do i put for question "2.) Enter the fair market value of the transferred property"? $0 as what the 1099-C lists, or $320k which is what is listed in the 1099-A?
p4681, question "7.) Enter the adjusted basis of the transferred property", what amount do i enter here in this situation (and let's just say no improvements or depreciation claimed)?
Hey, thanks so much for the tips! They are helpful. So I found out a bit more information, not sure if it makes a difference.
Turns out the reason the 1099-C has a fair market value of 0 is because the property was sold and they more than recouped their losses, but I wonder now if I even have to deal with this 1099-C cuz they recouped their losses? So I'm thinking there shouldn't be a discharge anymore but they said they are required to file this 1099-c due to their investors.
So I'm not sure how to report this on my taxes and explain the 1099-c to IRS or can I just ignore and not do anything to report this 1099-c at all and only deal with the 1099-a? Won't i get in trouble for not having a way to report the
primary ca home, $278k is the outstanding principle/debt cancellation. Both have same Date but different FMV (fair market value) listed. $0 FMV on 1099-c (maybe cuz they didn't sell home yet), but $320k FMV on 1099-a.
which FMV do i put for question "2.) Enter the fair market value of the transferred property"? $0 as what the 1099-C lists, or $320k which is what is listed in the 1099-A?
p4681, question "7.) Enter the adjusted basis of the transferred property", what amount do i enter here in this situation (and let's just say no improvements or depreciation claimed)?
property was sold and they more than recouped their losses, but I wonder now if I even have to deal with this 1099-C cuz they recouped their losses?
required to file this 1099-c due to their investors.
or can I just ignore and not do anything to report this 1099-c at all and only deal with the 1099-a? Won't i get in trouble for not having a way to report the
1099-c since they filed it to IRS?
Follow my instructions that started in the third paragraph of my reply. The IRS knows that your home was disposed of and will use the 1099-A data. You need to account for the sale and compute your net gain or disallowed loss,
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