AboutJohn Stancil, CPA Expertise I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants.
Visit my website at www.johnstancilcpa.com.
Also visit my blog, www.thetaxdocspot.com.
Experience I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.
Education/Credentials DBA University of Memphis
MBA University of Georgia
BS in Accounting Mars Hill College
Question Hi John,
I have a general question regarding the 1099's that are issued during a short sale/foreclosure. I have an investment property in Nevada (going into short or foreclosure) and a property in California.
Am I eligible for the Mortgage Debt Relief Act (due to insolvency?) HOw do I calculate this exactly?
I have 401k, IRA, and stock accounts, but that is basically it.
Answer Ajay,
Thanks for your question.
The mortgage debt relief act does not cover insolvency, that was already in the law. If you are insolvent you can exclude gain up to the amount of insolvency.
To determine insolvency total the fair market value of everything you own - including the property, retirement accounts, investments, clothing, vehicles, jewelry, furniture, etc. Total everything you owe (including the foreclosed property). If what you owe exceeds what you own, you are insolvent.
As an example, if you owe $500,000 and if you own $400,000, you are insolvent by $100,000.
