nospam wrote:
- quote -

consolidated statements from investment companies.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <VYOil.15515$YU2.6439[at]nlpi066.nbdc.sbc.com> , sfcnm-mtm[at]yahoo.com
says...

[snip]

- quote -

Do businesses have until the middle of February this year to send out their
forms?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

nospam wrote:
- quote -

not be a 1099-C. If you refinanced your purchase loan, the
refinanced loan is no longer a money purchase loan and is
therefore no longer a nonrecourse loan. You would get a 1099-C.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <gbqdnaicQvis-cPUnZ2dnUVZ_vSdnZ2d[at]supernews.com> ,
nospam[at]nospam.com says...

[snip]

- quote -

Is it possible that the lender will NOT 1099C me?

thnaks

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <T9w8l.3363$BC4.3257[at]nwrddc02.gnilink.net> ,
Phil Marti <prm20871[at]verizon.net> wrote:

- quote -

But they have no reason to agree, either.

Suppose I have a secondary lien. If I agree, I get nothing, period.
If I don't agree, they go to a lot of extra effort, and I probably get
nothing anyway but a miracle might happen. Besides, the nuisance
value of my claim ought to be worth something.

(If they're smart, they time it so that I get the tax writeoff a year
earlier by agreeing.)

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote:
- quote -

That's certainly true. But if a lender that forecloses can only
collect what they can sell the house for after the foreclosure (in an
arms-length transaction), it's faster, easier and cheapter for them to
go along with a short sale that would get them about the same amount of
money.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Paul Thomas, CPA" wrote:

- quote -

Don't forget that for every greedy borrower there was a greedy lender. In
such cases I have sympathy for neither. When we're dealing with ignorant
borrowers who bought more house than they could afford I still have limited
sympathy. After all, the end result is that they spent some time living in
a house that was above their means. The lenders should have known better.

- quote -

True, but except in those cases where the sale is being driven by
non-financial circumstances, it's usually the prospect of foreclosure that's
driving the process.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote
- quote -



"Short sale". A nice term for not wanting to be held responsible for the
results of your bad decision.

But as you seem to be describing it, the lender has to agree to the sale,
and therefore some resolution of the remaining debt. In that case the
actual sale is meaningless for tax purposes and you only have to focus on
the discharge of debt issue.





- quote -



A foreclosure is not even the same thing as selling your house for less than
the mortgage balance in an arms-length transaction.






--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<paulthomascpapc[at]bellsouth.net> wrote:

- quote -

Current usage or "short sale" in the real estate world is when the mortgagee
agrees to release its claim for less than full payment. I'm not in the
lending business, but I assume the lender weighs the cost/benefit of taking
what it can get in today's market vs foreclosing.

All lienholders have to agree, but since everyone but the first mortgage
would be wiped out in a foreclosure, lesser claims really don't have much
reason not to agree, assuming the property is going for FMV.

--
Phil Marti
Clarksburg, MD
"Paul Thomas, CPA"

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

JoeTaxpayer <JoeTaxpayer[at]comcast.net> wrote:
- quote -

Being under water or upside down just means owing more than the house
is worth. If you want to sell when you are under water but don't want
to pay the bank the difference between the sale price and the
outstanding mortgage balance, then you want a short sale.

This may be more frequent in some states, where some lenders are not
allowed to sue for a deficiency balance if they foreclose and then sell
for less than the outstanding loan balance, such as California.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Paul Thomas, CPA wrote:

- quote -

'The Google' often gives a good hint at current usage. Of course it
doesn't imply correctness, not in and of itself, but if a phrase is used
often enough and accepted without question, it can take on the new
meaning. The first full page of google hits (for 'short sale') refer to
real estate short sales.

I've always heard the situation described as being "underwater" or
"upsidedown on the mortgage".

Joe

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote
- quote -


I've never heard that term before now. I know that some people are selling
their homes for less than they owe, and in some cases for less than their
purchase price, but I don't see that it automatically generates COD income.
It could be that they just have to write a check at closing for the balance,
which is what the news report the last few weeks said was more likely
happening. People "paying" to get out of their house.



- quote -



Much more information is necessary to know what happened and if it has any
tax implications.







--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 2, 5:10 pm, Mark Bole <ma...[at]pacbell.net> wrote:

- quote -

Why not? Seems simple enough. One page, and maybe you only have to
check box 1a and/or 1e, and part II and part III might be empty. What
am I missing?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

removeps-groups[at]yahoo.com wrote:
- quote -

You have to calculate the amount of insolvency, and reduce your tax
attributes accordingly going forward. It's not a simple "taxable-or-not"
situation. If you're bankrupt, it's different still.

For many, it's not a do-it-yourself project if they want an optimum result.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

removeps-groups[at]yahoo.com wrote:
- quote -

The issuer will issue regardless, it's not their job to know what goes
on the taxpayer's return. It's not the fact of filing an information
form by the payer that determines ultimate taxability.

Form 982 will be needed, I don't recommend it as a DIY project.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Alan wrote:
- quote -

Laws vary by state, in California for example only the original purchase
money loan is non-recourse, any re-finance is recourse (unless you
negotiate different terms with the lender, but I doubt anyone ever does).

- quote -

Only on qualified acquisition debt, not equity debt. Essentially it
allows you to treat your acquisition debt as if it were a recourse loan,
even if it's not.

Not all states conform, unfortunately.

- quote -

That looks to me like a new pub that didn't exist one year ago... very
handy!

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 2, 3:35 pm, nos...[at]nospam.com (nospam) wrote:

- quote -

(1) Talk with the issuer to get them to not issue a 1099-C. If
they've issued one in error, ask them if they can un-issue it.

If that does not work then

(2a) You may attach a form 8275 to your return to explain your
situation (or maybe there is a better form to use), or
(2b) Don't attach anything to your return, but prepare a form like
8275 and keep in your records, and when the IRS asks, send them this
letter.

I'm not 100% sure about (2a) and (2b), but that's what I would do,
though someone might have a better suggestion.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 2, 3:00 pm, nos...[at]nospam.com (nospam) wrote:

- quote -

The cancellation of debt income is not taxable if you are insolvent or
in bankruptcy, so don't assume that you will get one. The IRS link in
my earlier post explains this and other basics.

http://www.irs.gov/publications/p525/ar02.html#d0e4867

You can also google for "1099-C" and you'll find lots of info.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

nospam wrote:
- quote -

generate cancellation of debt (COD) income. Many homeowners have
nonrecourse loans. This is a loan that is secured by the real
property and the lender's only recourse is to the property, not
to your personal assets. As such, there is no COD on a
foreclosure or short sale. However, in computing any gain on the
sale, one must use the amount of the outstanding loan before the
sale and subtract the cost basis to obtain the gain. This is
different then when one has a recourse loan. In this instance,
you compute the COD and then you compute the gain by subtracting
the cost basis from the FMV.

The Mortgage Forgiveness Debt Relief Act, provides the ability to
forgive up to a $2M of COD on a personal residence. However, any
amount of COD forgiven is used to reduce the cost basis before
computing the gain.

Finally, any gain on the sale or disposition of the personal
residence can be excluded ($250K or $500K on a joint return) if
the owner meets the two year rules of ownership and use and has
not already used this tax benefit within two years.

See IRS Pub 4681 for more details.
http://www.irs.gov/pub/irs-pdf/p4681.pdf

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9B87976B83321avocatstuyahoofr[at]130.133.1.4> ,
spamtrap[at]lexregia.com says...

[snip]

- quote -

How would someone notify the IRS of this?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >