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    MissJen8's Avatar
    MissJen8 Posts: 3, Reputation: 1
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    #1

    Jan 28, 2012, 12:55 PM
    Confused about how Form 1099-A will affect my 2011 taxes
    My partner and I were owners of a time share (based on a point system). We have been working with a company to help us get out of our time share. The time share company has said we are no longer under contract with them. They sent us a letter in Oct stating they had terminated our time share contract. My recent Equifax Credit Report shows a status of "Paid as agreed; time share account is closed or Paid account/Zero balance. Today I received a Form 1009-A from this time share company showing a balance of over $8000 and box 5 is checked saying I was liable for repayment of debt. I'm confused as to why they sent this form to me since the reported to Equifax that my account with them is closed. I also want to know will this $8000 be seen as income?
    Thanks for any help with these questions!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Jan 29, 2012, 12:59 AM
    Form 1099-A is NOT the form to worry about. What you need to worry about is Form 1099-C, which imputes income for the forgiven debt.

    Did you get a Form 1099-C as well?
    MissJen8's Avatar
    MissJen8 Posts: 3, Reputation: 1
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    #3

    Jan 29, 2012, 08:39 AM
    No I did not receive a Form 1099-C, only A. Does Form 1099-C mean my timeshare is in foreclosure? Will you also answer my questions in my initial question? Thanks so much!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Jan 29, 2012, 01:14 PM
    In answer to your question, it is likely the timeshare WAS foreclosed, and, yes, the $8,000 WILL be considered as income.
    MissJen8's Avatar
    MissJen8 Posts: 3, Reputation: 1
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    #5

    Jan 29, 2012, 01:20 PM
    So how is getting a Form 1099-C worse and how is it different from the 1099-A? You said in your first answer that "Form 1099-C imputes income for the forgiven debt." If I have to report the $8000 as income, how is it any different from what you're saying I'd do if I received the 1099-C?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #6

    Jan 29, 2012, 02:25 PM
    The reason Form 1099-A does not impose the imputed income is that, under the law, mamny people can have the inputed income forgiven if they meet certain criteria.

    Further, in some cases, the value of the house exceeds the debt, so nothing is forgiven.

    I suspect you WILL eventually get the Form 1099-C. If not, call the company who sent you the Fiorm 1099-A and find out if they will generated the Form 1099-C.

    You may also consider getting local professional help on this tax matter.
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