1099-c Question

[ilzhoefer]

When you get a 1099-c from a foreclosure and the foreclosure happened a year ago, what tax year does it have implications on?

The year the foreclosure happened or the tax year that you get the 1099-c?

I am considered insolvent the year the foreclosure happened and not the tax year I get the 1099-c.

Does this make sense?

[Anonymous]

It's whatever tax year is written at the top of the 1099-C...

[ilzhoefer]

Ok, can the 1099-A & 1099-C issued for the same property sent 2 different years have a different tax year writtem at the top of them?

[pipeguy]

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@ilzhoefer wrote:

Ok, can the 1099-A & 1099-C issued for the same property sent 2 different years have a different tax year writtem at the top of them?

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Should be one in the same if its the same property: http://www.irs.gov/instructions/i1099ac/ar02.html

That said, if the 1099-C was for a recent foreclosure you will NOT owe any taxes on the amount based on the  Discharge of indebtedness on principal residence excluded from gross income of individuals tax provision aka The Mortgage Forgiveness Debt Relief Act and Debt CancellationThe Mortgage Debt Relief Act of 2007

 (currently expired but extended through 12-31-2014).

see http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-

[Anonymous]

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@pipeguy wrote:

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@ilzhoefer wrote:

Ok, can the 1099-A & 1099-C issued for the same property sent 2 different years have a different tax year writtem at the top of them?

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Should be one in the same if its the same property: http://www.irs.gov/instructions/i1099ac/ar02.html

That said, if the 1099-C was for a recent foreclosure you will NOT owe any taxes on the amount based on the  Discharge of indebtedness on principal residence excluded from gross income of individuals tax provision aka The Mortgage Forgiveness Debt Relief Act and Debt CancellationThe Mortgage Debt Relief Act of 2007

 (currently expired but entended through 12-31-2014).

see http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-

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+1 that happened to me. State may not exempt it the way the Federal does though. 

[ilzhoefer]

Yes it foreclosed June 2014, deed transferred sept 2014. Received 1099-a for 2014, but hoping for a1099-c this year. It was a primary residence. Statue of limitations is a year after it fc to get a deficiency judgment.

[pipeguy]

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@ilzhoefer wrote:
Yes it foreclosed June 2014, deed transferred sept 2014. Received 1099-a for 2014, but hoping for a1099-c this year. It was a primary residence. Statue of limitations is a year after it fc to get a deficiency judgment.

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I assume since the foreclosure was 2014 that any 1099-C issued would be covered under the 2014 law - which would exclude any tax obligation. A deficiency suit or judgment for the difference in value/balance is a whole different matter.

[ilzhoefer]

Banks only have 1 year from the fc date to pursue a deficiency judgement. They can get one after that, but the statue of limitations in my state is one year.
If they get a judgement within that year they can renew it over and over until you pay or file bk.

[pipeguy]

http://www.nolo.com/legal-encyclopedia/after-the-foreclosure-deficiency-judgments-taxes