A lender issued an IRS Form 1099 discharging deficiency debt accrued after a foreclosure auction in 2013. (The value of the property failed to satisfy the foreclosure judgment resulting in a deficiency debt). NOTE: The property was not the borrower's principal residence.
1) Can Lender pursue the deficiency debt despite issuance of the form 1099-C?
2) Can Lender file a corrective 1099 claiming the debt should not have been cancelled?
3) Does it make a difference if the 1099 was issued but borrower failed to report the discharge as income?
Thanks in advance!
1) Can Lender pursue the deficiency debt despite issuance of the form 1099-C?
2) Can Lender file a corrective 1099 claiming the debt should not have been cancelled?
3) Does it make a difference if the 1099 was issued but borrower failed to report the discharge as income?
Thanks in advance!
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