Tax on real estate 1099c?

[gleam]

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

I am looking to settle a real estate property with a mortgage company. If they forgive the debt and issue a 1099c for the difference (roughly $180k) would it be waved by the Federal Government under the H.R. 3648: Mortgage Forgiveness Debt Relief Act of 2007 (form 982)?

If not, would I have to pay the taxes based on my income or is it based on a different formula?

Thank you for your help!

 

[LdiJ]

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

I am looking to settle a real estate property with a mortgage company. If they forgive the debt and issue a 1099c for the difference (roughly $180k) would it be waved by the Federal Government under the H.R. 3648: Mortgage Forgiveness Debt Relief Act of 2007 (form 982)?

If not, would I have to pay the taxes based on my income or is it based on a different formula?

Thank you for your help!

Is the house your primary residence? That act applies only to a home that is your primary residence, or was your primary residence before you lost it/short saled it.

If you are required to pay tax, then its based on your total income. Regular income plus the cancelation of debt.

However, if it was a rental/investment property then you can also take the capital loss for the difference between the original price of the property and the amount that it sold for. The loss may be limited to 3000.00 per year until its used up, unless you have other capital gains to credit it against.

 

[davew128]

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