1099-C VS. 1099-A Are You Confused Yet?
1099-C Form 1099-C is a cancellation of debt. This form is used by financial institutions to report canceled debt — debt that has been forgiven for less than the full amount — to the IRS. If you receive a 1099-C for a foreclosed property, you should not, but may, receive a 1099-A. Canceled debt may require the borrower to report the canceled amount as income, which means that the IRS may add the canceled amount to your gross income and tax you accordingly. Sometimes there are exceptions, and often, the borrower may exclude the forgiven debt from income. These forms are complicated. If you receive one or more of these forms in any tax year, I suggest you find a good tax preparer. For assistance, call Opem Tax Resolutions and The Law Office of Steven A. Leahy, PC, at 312-664-6649 for a free consultation.
One of the biggest questions I received this tax year stemmed from 1099-A and 1099-C forms. The following is a brief description of each form and how they should be used when filing your taxes. 1099-A Form 1099-A is an acquisition or abandonment of secured property. This form is used by lenders if they acquire secured property in full or partial satisfaction of a debt, or if they know that the property has been abandoned. Typically, a homeowner will receive a 1099-A from a lender after a piece of property is foreclosed. For tax purposes, a foreclosure is treated as a sale, and the borrower must calculate capital gains or losses. The borrower should use the information on 1099-A as the date of sale, selling price of the property, fair market value, or outstanding balance. How you report the foreclosure on your tax return depends on the nature of the property, the state the property is located in, and the purchase price.
MEMES
Ame r i can Bus ine s s TRIVIA
1. Marvel once owned the rights to what word? a. Human b. Zombie c. Cat d. Plane 2. The Coca-Cola logo is recognized by what percentage of the world’s population? a. 100 percent b. 68 percent c. 94 percent d. 79 percent
4. Burt’s Bees is owned by what company? a. Bath & BodyWorks b. Clorox c. Pepsi d. Dove
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BackRub
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