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    JamezG's Avatar
    JamezG Posts: 2, Reputation: 1
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    #1

    Aug 26, 2010, 05:02 AM
    What do I do if FMV is more than balance on form 1099-A?
    Form 1099-A

    Line 1: Date of Acquition is 10/13/2009
    Line 2: 218,000
    Line 4: 241,000
    Line 5: NO

    Question 1: Do I need to file anything with IRS?
    Question 2: Foreclosure is not showing up on my credit report and it's been almost a year since I received form 1099-A. Does this mean my home was not officially foreclosed on or is this just an error that will eventually show up on my credit report?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Aug 26, 2010, 06:03 AM

    1, No - there is no need to file anything with the IRS unless you receive a 1099-C. The 1099-A form is for information purposes only. In your case you will not receive a 1099-C, since the FMV was greater than the amount of the outstanding loan principal, and therfore you effectively paid off your loan by giving the bank a house that was worth more than the loan. Hence you do not have any taxable income from this event.

    2. I can't speak to how your credit report will reflect the. Foreclosure. Perhaps you can ask that question in either the "credit" or "bankruptcy & debt" forums.
    wnhough's Avatar
    wnhough Posts: 200, Reputation: 12
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    #3

    Aug 26, 2010, 10:13 AM
    QUOTE," Do I need to file anything with IRS?"--No.However, basically as you can see, you determine the amount of your gain or loss and any ordinary income from cancellation of debt as shownon the form.You report that you sold the property foreclosed for a price of $218,000. Suppose that the proeprtyis your primary residence and you have resided there at least two of the last five years, then no tax will be due on the sale. Also, as the FMV of the property is HIGHER than the outstanding balance on the mortgage($241,1000>$218,000), it will be reported as a GAIN. The lender, after satisfying the debt, will give you the excess amount, gain, resulting from the sale of the property. In general,the FMVmeans the gross foreclosure bid price.
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