Please help! There are conflicting answers even within this forum. I have recieved a 1099-A for a home I foreclosed on in 2008. On my 1099-A Box 2: Principle Outstanding balance is less that Box 4: FMV. Here is what I would like clarity on please:

1. How do I handle or What form do I use to file the 1099-A on my tax return?
2. How do I determine the capital gain/loss?
3. Can I use the 1099-A to file for the exclusion under form 982 or MUST I have a 1099-C?

Any help is greatly appreciated.

AtlantaTaxExpert

Since Box 2 is less than Box 4, there is NO tax consequences to the foreclosure, because, theoretically, the mortgage company will be able to recover their costs when they sell the house. No Form 1099-C will be forthcoming. There are no capital gains or loss on the sale of your personal home.

If you have not already done so, just file your 2008 tax return as if the Form 1099-A does not exist.