Tax Time Question: Anything about my foreclosure?

[Ifonly]

I can't stress enough to take your taxes to a professional if you're in this situation. I honestly can't give specific advice (regarding forms and the like) due to the ethics concerns (plus, I would never want to give someone poor advice). A good tax accountant will look at your entire tax situation and should be able to handle all of this.

[feelingnutsy]

Does Schedule D need to be filled out---along with the 982---or just the 982?

[Amy26]

Okie, I called them...gave them my new address. She said there is a "year end statement" that they are sending out to me but she said she couldn't tell what type of form it was. So, I won't know what the heck they are sending me till I get it I suppose.

But either way, if its a 1099-A or a 1099-C ... I'm covered right? I just fill out that 982 thingy and check the bankruptcy box? I suppose I might have someone else do my taxes this year just to make sure I do it right... if I get the "A" do I still do the 982?

Also, would I need to worry about my 2nd mortgage company sending me a 1099-c as well?

[Amy26]

Tobee, Amy's question is regarding receiving a 1099 rather than a 1098.

Amy, if you're done with the process there shouldn't be any harm if the company having your correct address. And if you're to receive a 1099, that should already be set in their system - you won't cause that by updating your address. However, if you file your taxes without it and it's flagged by the IRS, they will not view non-receipt of the form as an "excuse" (so to speak).

Ah ok, so I can just call them and ask them if they have me issued to receive something and then give them my new address. I didn't know if it was like up in the air if they would send one or not and didn't wanna like rock the boat by calling them... I have had a hard time dealing with them in the past... its not a mainstream lending company...they are called Acacia federal savings and they are just aweful to deal with. I actually never even knew they took my house back... I kept calling them asking when they were going to proceed with the foreclosure only to finally learn that oh by the way... your house reverted last month... lol.

[tobee43]

Tobee, Amy's question is regarding receiving a 1099 rather than a 1098.

Amy, if you're done with the process there shouldn't be any harm if the company having your correct address. And if you're to receive a 1099, that should already be set in their system - you won't cause that by updating your address. However, if you file your taxes without it and it's flagged by the IRS, they will not view non-receipt of the form as an "excuse" (so to speak).

no...i'm speaking about a 1098 (interest pd on the mortgage).....not a 1099... we rec'd them on the interest of the loan on the house in foreclosure..as it hasn't foreclosed yet.....

[tobee43]

Hi tobee! I really didn't quite catch what you're saying there... it confused me muchly.

Little background... I stopped paying everything on this house in april of 2009. Then filed BK and discharged by 09/09. They paid taxes for me, so I had an escrow account and I did not pay those either. So, last year I just got January - April of deductions for my interest in the house when I filed my taxes. It took them about a year to foreclose and that was final April 5, 2010. So, I paid absolutely nothing on the house in 2010. So, I know I'm not entitled to any deductions....

I just want to make sure I report the loss of the house properly and not get into any trouble with the IRS. I'm a little confused and concerned with what you said about the foreclosure fees? :0

i'll attempt to clarify it sorry....

even tho we were actually in the "foreclosure" process...the first year were in fact issued a 1098 on the interest of the loan that we paid up until the time we surrendered the house...we were also entitled to take the taxes paid ...or any point...etc. included for that tax year...

fast forward...in many states...the one we own our property in...(NOT where we live)...many of the banks holding the mortgages add foreclosure FEES and COSTS...to the end of what you personally owe them....many times they include property taxes they paid FOR YOU....so the bank simply adds that to the end of your final costs and fees at the time of foreclosure.....

fast forward once again.......last year we took partial taxes from that property because we were IN FACT issued a 1098..( that is interest pd on the mortgage) why??? because the bank charged our account and put it on the back of the mortgage they are foreclosing on...complicated......absolutely....

this week...i spoke with our accountant...i know we are entitled to take a deduction again...but we simply are not...remember...you don't have to. it's not the same thing as holding back income from the IRS....but if you decide...for an example that you gave to charity that year 6k....and for some reason you want to only claim 3k...that's fine...

in as much as the 1099a situation....of f2b.....wow...that's a switch and a half NOT To be upside down....it's usually the 1099c's freakin people out not the 1099a's....

"Form 1099-A from the lender showing several pieces of relevant information. The information on Form 1099-A will likely be needed to report the foreclosure properly on your tax return. A foreclosure is treated as the sale of property, and the former property owner will need to calculate their gain or loss on the property. But unlike a normal sale, there's no "selling price," and this is where the Form 1099-A comes into play."

and here's another explanation of the 1099a http://taxes.about.com/b/2010/02/27/...orm-1099-a.htm

[Ifonly]

Tobee, Amy's question is regarding receiving a 1099 rather than a 1098.

Amy, if you're done with the process there shouldn't be any harm if the company having your correct address. And if you're to receive a 1099, that should already be set in their system - you won't cause that by updating your address. However, if you file your taxes without it and it's flagged by the IRS, they will not view non-receipt of the form as an "excuse" (so to speak).

[free2breathe]

We received a 1099-A (abandonment of property) when we went through foreclosure. We, unlike so many in today's housing mire, were not upside down, so there was no cancellation of debt, thus no 1099-C (cancellation) for us. I found this article that explains what to expect fairly well.

http://ezinearticles.com/?IRS-Form-1099-A,-1099-C-and-the-Cancellation-of-Debt-in-Foreclosure&id=3928162

I hope that you can get some clarification by reading through this Amy ;)

[Amy26]

Hi tobee! I really didn't quite catch what you're saying there... it confused me muchly.

Little background... I stopped paying everything on this house in april of 2009. Then filed BK and discharged by 09/09. They paid taxes for me, so I had an escrow account and I did not pay those either. So, last year I just got January - April of deductions for my interest in the house when I filed my taxes. It took them about a year to foreclose and that was final April 5, 2010. So, I paid absolutely nothing on the house in 2010. So, I know I'm not entitled to any deductions....

I just want to make sure I report the loss of the house properly and not get into any trouble with the IRS. I'm a little confused and concerned with what you said about the foreclosure fees? :0

[tobee43]

Hmm ok thanks... I am just worried that if I call to give them my new address that it might trigger them to send me one. Or if they would even take an address change to a closed file.

i would call the bank and see if they issued their 1098's...that's what it is for interest...and if you paid your taxes it should be on the same statement...if they have and you didn't pay anything i wouldn't worry about it....HOWEVER...that being said you need to make certain the bank did not include it with their foreclosure fees and cost to YOU because then you ARE in FACT entitled to the deduction....just to make it easier for you...

[Amy26]

Hmm ok thanks... I am just worried that if I call to give them my new address that it might trigger them to send me one. Or if they would even take an address change to a closed file.

[Ifonly]

I can not offer you professional advice but I can tell you that you should never assume when it comes to your taxes. The IRS' position is that all individual taxpayers are responsible for knowing what they should be reporting - for instance, even if you employer failed to give you a W2, you are still responsible for reporting your income, etc.

I would make certain that the company had my current address for starters.

[Amy26]

Oh ok... so, what if I don't get any 1099 by 1/31... should I assume that's ok then? I believe my mortgage company has a very old address for me and if they tried to send me something I would never get it... should I call them?

[bulletproof77]

My foreclosure was sold 02/10, Included in Chapter 7. My tax person (CPA-retired IRS) will file a Form 982 just for "insurance", but anticipates no consequences with the 1099. And she has done a lot of these lately.

[Ifonly]

I was logging back in to say exactly what Flamingo said. I assumed you surrendered the property in the bk which would make the debt unsecured therefore no 1099. I should have asked for more details. If you receive a 1099, you absolutely need to see a tax professional (NOT a store front like H&R Block,etc.).