Hi,
I purchase a home in California which I refinanced 2 years ago and I got a 1099-A with the outstanding balance being $0.00 Fair Market value $122,000.00 and YES on box 5. What does this mean with my taxes and future liability.

Is this 1099-A from your current mortgage holder? Or is it from a previous mortgage company that used to have the mortgage before you refinanced 2 years ago? In any event, because the amount of outstanding principal is $0, there is no tax implication here for you - this 1099A is for information only. If there was any income you would have to report, they would have sent a 1099-C instead of a 1099-A.

Thank you. My other concern is the YES on box 5 (Personal Liability). Someone told me that this means the debt was not cancelled and I have to pay the difference. What do I do? Do I get an attorney or talk to the lender?
I am so scared with all of this.
Thank you so much for your quick reply.

Sorry, the 1099-A is from the current lender.