Foreclosed and got Form 1099-A

[loancorp]

What is the name of your state (only U.S. law)? CA

Hello.
I live in CA. I had investment property in Florida. Builder went bankrupt and the house was foreclosed unfinished in 2008.
Now i got 1099-A form the bank. Balance of the principal is 174k and Fair Market Value or the amount bank bought back the house is 112k.
Box 5 is checked yes that is i am responsible for the repayment of the debt.
My first question is do I have to pay taxes on the difference?
and my second question is should I consider the matter solved ro the bank
might still come after me for the deficit.

Thanks in advance.

[HomeGuru]

Originally Posted by loancorp

What is the name of your state (only U.S. law)? CA

Hello.
I live in CA. I had investment property in Florida. Builder went bankrupt and the house was foreclosed unfinished in 2008.
Now i got 1099-A form the bank. Balance of the principal is 174k and Fair Market Value or the amount bank bought back the house is 112k.
Box 5 is checked yes that is i am responsible for the repayment of the debt.
My first question is do I have to pay taxes on the difference?
and my second question is should I consider the matter solved ro the bank
might still come after me for the deficit.

Thanks in advance.

**A: since it is a 1099 that you got, yes the money is reported as income and taxes are due dependent on your agi. Most likely the bank is writing the loss off but they could still go after you.