I received a 1099-A for a timeshare property that I quit paying on after I became disabled earlier last year(07).My question is how will this affect my taxes. Box 2 showing outstanding principal & box 4 showing fair market value are the same. Does this constitute a wash and there is no tax due or what? I am currently living in Georgia and my only source of income is disability benefits.

Thank you in advance for your replies.

It means that the lender has forgiven the debt essentially making a gift to you of the balance. So you have to pay taxes on it.

Quote:

---

Originally Posted by ScottGem

It means that the lender has forgiven the debt essentially making a gift to you of the balance. So you have to pay taxes on it.

---

Since the debt has been "forgiven" and they are giving me a tax bill for it, does this mean that I now owe the property?

No. It means they reclaimed the property and took a loss on the balance owed. That's what the 1099-A amount is.

Scott has explained it well.

Claim the additional income on Line #21 of Form 1040.

Thanks for your replies.

Glad to help!