Tax Law (Questions About Taxes)/1099-A

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Question
We received a 1099-A for foreclosed house in CA purchased in 2005 for $367,500 as primary home, non-recourse loan, started renting it shortly after that. Been claiming the rent, repairs, depreciation on schedule E, with passive activity loss limits, about 130K in losses.
1099-A shows
block 2 $275,779
block 4 $135,000
block 5 not checked

My tax man says I need the 1099-C, I talked to BofA they said they will not be issuing one? They said the loan has been written off, my credit report shows foreclosure but $0 bal on the loan.

Do you think I will be receiving a 1099-C in the future? Also can I claim the loss on my taxes?

Thanks

Answer
Patrick,

Thanks for your question.

If they said they are not going to issue a 1099-C, then I would not expect that you would be getting one, even though it is legally required.

You can claim the loss on your taxes, but you need to report the cancelled debt as income.  If you fall under an exception and do not pay tax on the cancelled debt, you would need to reduce your basis by the amount of cancelled debt.

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

Publications
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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