Nanette <taxingmatters[at]zoominternet.net> wrote:

- quote -

Report the 1099-A as a sale on Schedule D, and calculate the
gain as normal.

On the next line write: "Disallowed loss on sale of personal
property" and in the gain/loss column enter as a negative
number the gain just calculated. These two lines cancel
each other out while adding the 1099-A Sale amount to the
Sales Price column of Schedule D.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Nanette wrote:

- quote -

There is no cancellation of debt (FMV > OP), so there is no
cancellation of debt income to report. However, there was a
disposition of a capital asset. The amount realized was the
loan balance wiped out. This gets reported on the Schedule
D. If the loan balance was in excess of the cost basis there
is a realized gain that would be taxable if the exclusion
rule for the sale of a main home could not be met. If the
balance was less than the basis there is a nondeductible
loss.

Even if the rules for excluding the gain on a main home are
met, I would still report the disposition because there is a
paper trail to the disposition (1099-A).

All of the above assumes that the person was not personally
liable for the debt.

--
Alan
http://taxtopics.net

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My client received a 1099-A from the abandonment of their
primary residence. The Balance of Principal Outstanding is
approx 80K, while the fair market value is listed at 128K.
I realize that there is no loss, nor would it be reportable
if there was, my question however is does this still need to
be reported somewhere, such as schedule D, or just ignored.
On schedule D, I am not sure how I would get it to NOT
compute the gain/loss since it was a personal residence.
Please Advise

Nanette

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