[TEgnor]

I received a form 1099-A. Box 2 is $275,000 and Box 4 is 317635. I am personally liable.

I think I can subtract subtract my adjusted base for the property (purchase price plus improvements $158,000) from the amount in line 2 (275,000) and the result is a gain of $117,000.

However since the house was my primary residency, I am excluded from paying any capital gains (gain less than $500,000 for married couples filing jointly). I was NOTsent a from "C" on the 1099-A.

First, are my assumptions correct, and if not please advise. If correct than my questions is:

Where and how do I specifically input this information and on which form? Also, is a form D required if the gain is excluded?

[ebaines]

On the 1099-A form Box 2 is the amount of principal outstanding on your mortgage (i.e. the amount you owed the bank) and Box 4 is the fair market value of the home. Since the amount in Box 4 is greater than the amount in Box 2, you effectively sold a house valued at $317K for "only" $275K. Hence the bank was able to collect enough when they sold the house to get its money bank, and consequently you do not need to worry about reporting taxes due for loan forgiveness.

You are correct about the gain calculation, and as long as the property was your principal residence for at least 2 of the previous 5 years you owe no tax on the sale. Unless you receive a form 1099-S, according to the IRS you do not need to report the sale on your taxes at all - see Publication 17 (2013), Your Federal Income Tax "Reporting the Sale" near the end where it says :

Do not report the 2013 sale of your main home on your tax return unless:

• You have a gain and do not qualify to exclude all of it,
  
• You have a gain and choose not to exclude it, or
  
• You received Form 1099-S