What is the name of your state (only U.S. law)? Indiana
Hello. I am desperate for help regarding a 1099-A form. I've yet to receive all of my tax documents, but I can't figure out what to do with this 1099-A. First off, we did not abandon this property. We were in the process of moving out, and the lender sent some one to lock up the property 5 days prior to the sherrif's sale. This home was our primary residence. We've received a 1099-A stating in box 1 that the balance of the outstanding principal is $125,769.98 and in box 2 that the FMV is $87,500.00 Does this mean that we would have to claim the difference as taxable income? Also, I completely disagree with the FMV amount. When our realtor listed our house initially, she listed it at $139,900; after a market analysis, we changed the listing to $123,000 (so that we could possibly execute a short sale). We do own a second property that was occupied by a family member, which is where we are living now. This property still has a mortgage, and with the market, we do not have any equity in this property. I believe that we may be insolvent, but I can't be sure. Should I ask the lender for a 1099-C, or would that make any difference? I don't even have a clue where to begin on this, so any help would be appreciated.