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GraeyMatter · Jan 30, 2009, 07:11 AM

I received a 1099-A today.

I did have a house go into foreclosure this year.
It was the only house I owned, but I did not live in it.
I moved for work and was unable to sell or lease the house and ultimately lost it.

It was a VA loan.

The 1099-A states
Box 2: $142603.05
Box 4: $133944.66
Box 5: Yes

The instructions say, "If the amount in box 4 is less than the amount in box 2 and your debt is canceled you may have cancellation of debt income."

How do I know if the debt was canceled?

My lender never sent any final paperwork telling me the final outcome on the foreclosure. I worked with them for months and they simply sent a letter telling me that they would not consider any of the options/programs to avoid foreclosure and I never heard from them again until I get this 1099-A.

Lastly, how do I know if I qualify to use Form 982 under the Mortgage Forgiveness Debt Relief Act of 2007?

Everything refers to the 1099-C (I have 1099-A) and says "and the debt is canceled" (I have no idea!).

Any help is greatly appreciated.

AtlantaTaxExpert · Jan 30, 2009, 01:29 PM

You probably DO qualify if you lived in the home anytime in the past two years.

You need to contact the mortgage company and find out if they are issuing a Form 1099-C. However, you should file Form 982 to address the issue, just to be on the safe side.

nierikadcd · Feb 10, 2009, 11:33 AM

GraeyMatter,

I am in an identical situation as you, except my Box 4 on the 1099-A is $49,000 less than Box 2. I also did not receive a 1099-C, so today I called my lender, Countrywide, to see if they would be issuing a 1099-C. After being on hold for 15 minutes, they still could not give me an answer and said they would get back to me within two business days! It is my understanding from the IRS website that financial institutions had until Jan. 31st to issue all tax documents, so I fear that I may not be receiving a debt cancellation and could be held liable in a deficiency judgment for the $49,000 plus attorneys fees & penalties. Who is your lender, and have you been able to get any more information about the 1099-C? ~Lori