1099 question regarding debt forgiven: I have a client who owned his house for 4 years, rented it 6 months?
1099 question regarding debt forgiven: I have a client who owned his house for 4 years, rented it 6 months?
ago, needs to do a short sale on it - or it may become a foreclosure. What time period is it that the IRS will say it's his personal residence for that debt forgiven legislation that just passed that says the IRS will not 1099 him if it was his personal residence?
Answers:
Chosen Answer
v b: See IRS publication 4681. The debt foregiveness act uses the same definition as section 121--the safe harbor is 2 years out of the last 5 as his personal residence. Note, he may get a 1099-A or a 1099-C or both. The 1099-A is the "sale" of the house and for the year of rental, you report the sale on 4797. The 1099-C is if there is debt cancellation, then you use form 982 to exclude it.
2008-06-16 23:46:50
v b: See IRS publication 4681. The debt foregiveness act uses the same definition as section 121--the safe harbor is 2 years out of the last 5 as his personal residence. Note, he may get a 1099-A or a 1099-C or both. The 1099-A is the "sale" of the house and for the year of rental, you report the sale on 4797. The 1099-C is if there is debt cancellation, then you use form 982 to exclude it.
2008-06-16 23:46:50