1099-A Do I report this on my taxes? – Money & Services

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I received a 1099-A on a mortgage from a home in Texas. I moved for work in 2007 and finally in 2009 with no renters or buyers (even a short sale) had to do a Deed in Lieu. It cleared in March of 2011. Box 2 is 126,040 and box 4 is 45,000. Box 5 is checked that I am liable for repayment. I did my taxes through turbo tax and the site stated if it was a home or vehichle I did not have to report it. Do I? Also, should I request a 1099-C from the mortgage company?

Answer

There IS a process under which you can exempt yourself from any tax on the forgiven debt.

Under a law passed by Congress in December 2007, you can avoid paying any taxes on this Form 1099-A by filing Form 982 with your tax return.

However, I STRONGLY suggest you get local professional help filing, because you have to meet certain criteria to qualify.

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