I received a form 1099a where the principal outstanding amount equals the FMV (box 2 = box 4) and am curious what implications this may have. Box 5 (was borrower personally liable for the loan) is checked yes.

Thank for your time and response.

There should be NO tax implications at all, because, theoretically, the mortgage company recovered sufficient funds from the sale of the foreclosed property to cover the balance of the mortgage.

If not, you will get a Form 1099-C; the income shown on THAT form is what must be shown on Line #21 of Form 1040 as income.