Hello,

Help me understand this... I owed $482,000(Dec 09)they foreclosed Jan 2010 - It sold in Dec 2010 for $335,000. I got a 1099A for $482,000. What does that mean? Under the new Tax Law passed am I taxed on
The difference or Is it forgiven? My 1099A say "abandonment'

Forgiven doesn't meen obligation free... you had a debt you defaulted on... their "forgiving" the loan creates an IRS recognised phantom income to you... thats taxible as income. Legal debts don't disappear without SOMEONE getting the tax bill.

If this house was your primary home, there IS a process by which you can be forgiven the tax debt on the phantom income that Smoothy describes.

However, you have to qualify, and the criteria is complex, so you should get professional tax help.

Finally, the income is NOT recognized by the IRS unless a Form 1099-C is issued.