In a short sale on the 1099s is the reported value the difference of proceeds from the amount owed or is the amount on the 1099 or just the sale price

Asked by Bob, 90638 Sun Dec 26, 2010

sale of property 130,000, promissory note 55,000. total original loan owed 246,500. Should the 1099s be 61,500 amount of debt forgiven or should it be 130,000 total amount of the sale?

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Bob Movin-On, , Hartford, CT
Tue Dec 28, 2010
You have started in the right direction, but the lender can add any costs they may have incurred since the default.
I am sure you were behind on payments, those plus all late fees can be included.
Was the home in foreclosure? All legal costs will be added.
Was there a realtor involved? Those costs are added
And so on.

Bob Patrick
Buy a home after foreclosure, short sale or deed-in-lieu-of expert
Movin-On LLC
Helping families/people that have lost their homes get back into a new one in as little as 6 months.
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Centermac Re…, Agent, Fremont, CA
Mon Dec 27, 2010
Usually the lenders will issue 1099s for the debt discharged at the end of the year. In this case the 1099s will show 61,500, not probably not the total amount of the sale. See the lenders want to get tax benefits as well.
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Jacqueline W…, Agent, Irvine, CA
Sun Dec 26, 2010
The 1099c will be for the amount of debt forgiven. You need to seek guidance from a tax advisor who can help you navigate next steps because the manner in which this income will be treated depends upon a number of factors including your financial condition at the time the sale was complete; whether or not this was the short sale of a primary residence and whether or not the debt forgiven was for the initial purchase money loan or for a refi. Let me know if you need a referral to a CPA who specializes in this area.
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Short Sale D…, , Los Angeles County, CA
Sun Dec 26, 2010
The 1099 should be for the total amount forgiven but you will also get a 1099 from the escrow for the sale amount, this is standard procedure but you should talk to your tax accountant for further advice. Why did you sign a promissory note?

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