Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
I have filed my 2008 federal income tax return,
including two 1099 statements from when I lost my house last
year in foreclosure. Those statements were a little scary. One
was a 1099-A for the Acquisition or Abandonment of Secured
Property (my house). The other was a 1099-C for the Cancellation
of Debt (the second mortgage on my house). My tax accountant
included the totals on Form 982 which is for the Reduction of
Tax Attributes Due to Discharge of Indebtedness. One of the
check boxes at the top of the form is for "Discharge of
qualified principal residence indebtedness" which is exactly
what this debt was from, my primary residence.
Next year, I will
probably have more 1099's due to my two investment condos which
will most likely go back to the banks in foreclosure sometime
this year. I may not be so lucky with these two properties as
they are not my primary residence although I am thinking about
moving back into one of them and making it my primary residence
to save money and to qualify it as a primary residence so as to
avoid having to pay tax on a foreclosure 1099 statement. Funny,
huh, I just filed my tax return for 2008 and I am already
thinking about my 2009 income tax return.
As a side note on my
properties, the house that I lost in foreclosure last year is
still on the market at less than half what I paid for it back in
2006. The two investment condos do not have a foreclosure date
set yet. Of course, one of these condos has had a foreclosure
sale date set and cancelled twice. I think that banks are still
trying to catch up with all of their foreclosures and they are
probably trying to sort out the new foreclosure assistance and
incentives created by the Obama Administration. Unfortunately, I
do not think that anything thus far will help me keep either of
these properties. At least, I hope to keep my house in
Montgomery. I have a renter in that property which covers the
mortgage.
If you haven't done your
taxes yet, you'd better get to them.
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