Deed in Lieu- 1099- Tax Consequences?

[keepsmiling]

If NOT going BK and doing DIL, are there tax consequences?

[tobee43]

if that bank accepts the deed in l....it's a "straight" out exchange....so there should be no tax ramifications although there was no BK....at least that is what i have been known to happen to those that did a direct deed in lieu...

we did one...and had rec'd nothing since we also signed a release as well as the bank did that we were settling the debt with the deed exchange. (we also have one property with chase that will not do a deed in lieu so we are still waiting on that one).

maybe someone else has had another experience they can share...but that is what happened to us...

[HHM]

It depends...strictly speaking, YES, there can be a 1099-C when you transfer property with a DIL. A DIL is still a surrendering of property and a cancellation of debt. What you get to negotiate is an agreed to value of the property. It sounds like in Tobee's case, they agreed on a straight exchange. But that scenario is more the exception than the rule.

[tobee43]

It depends...strictly speaking, YES, there can be a 1099-C when you transfer property with a DIL. A DIL is still a surrendering of property and a cancellation of debt. What you get to negotiate is an agreed to value of the property. It sounds like in Tobee's case, they agreed on a straight exchange. But that scenario is more the exception than the rule.

agreed....and i just wish chase would have gone for it as well...

and i do have a question hhm...i have seen or heard that is more likely to receive a 1099A for a property situation than that of a 1099C...which seems a "favorite" of the cc companies???

which is most likely to be applicable??? in what scenario??...i had seen and dealt with 1099S's and was able to offset that amount with a capital loss......and i mean really now...there must be a 1099 for everything!! LOL!!..A-Z's

[HHM]

This should clear it up on 1099-A vs 1099-C
They are different things.

http://methnerlaw.com/2011/02/06/irs-form-1099-a-and-1099-c-after-bankruptcy-what-do-i-do/

[tobee43]

thanks!