How is tax liability calculated from a 1099 a? – Money & Services


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I received a 1099A from a foreclosure in 2009. Box 2 is$ 269,335.83. Box 4 is $308,265.26. Box 5 is checked yes. What is the liability or loss? No bankruptcy. Primary residence lived in less than 2 years.


They sent you the 1099A for informational purposes only. It seems that you gave your house to the bank in exchange for loan forgiveness of $269K (box 2). The fair market value of the home was $308K (box 4), so the bank came out ahead on this deal, and you have no tax consequences UNLESS the $269K is greater than your cost basis in the home. Unfortunately, if the $269K is less than your cost basis – you can not take a loss on it for tax purposes as your home is considered to be personal property, not an investment.

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