Tax Law (Questions About Taxes)/1099 A

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Question
We received 1099A with principal balance of 232,000 and fair market value at 246,000.      We bought the house as a primary residence for 245,000.  And the box for personally liable is checked.   We live in AZ.  I am a realtor, so I know the house sold for 187,000 in oct 2012.

What will be our tax consequences and how do we file it?   

Thanks for your help.  

Terri.

Answer
Terri,

Thanks for your question.

Since it was your personal residence, there are no tax consequences at this time.  A 1099-A is not an indication that the debt has been cancelled.  So you don't do anything.

When (and if) you get a 1099-C, you will need to complete Form 982. This is an indication that the debt has been cancelled. On the Form 982, you may indicate that the COD income is excluded from tax because you qualify under one of the exceptions.  If you don't qualify, you will have to report the difference in the cancelled debt and the FMV (as indicated on the 1099-C) of the home on line 21 of the 1040.

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

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John Stancil, CPA

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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 am Professor Emeritus at Florida Southern 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 CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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