Tax Law (Questions About Taxes)/Forclosure tax question


I recently recieved a 1099-A "Acquisition or Abandonment of Secured property" form in the mail. Box 2 is $101,171.39 and Box 4 is $40,000.00

My question is will I owe a ridculous amount of money to the IRS because this cancelled or forgiven debt is considered income?


If the property that was foreclosed was not your primary residence, you do have taxable income from the debt forgiveness. If the house was your primary residence and the debt was acquisition indebtedness - debt incurred to purchase the house or refinanced and you did not take money out - you can exclude the income if you owned and lived in it as your primary residence for 24 of the past 60 months.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA


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 I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


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.

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