What is the name of your state (only U.S. law)? California
House was foreclosed on and auctioned off. then received a 1099-A form from the bank. stating :
Balance of Principal = $116,000 ( Approximate)
Fair market value of property = $97,000 ( approximate)
box checked that Debtor was responsible for repayment of debt.
Loan was completely satisfied through the sale and residual is still due to me. ( Approx $6,000)
But the actual transaction was as follows.
Home sold at auction for $155,000
actual balance including interest and fees was $139,000.
$147,000 was taken to cover all expenses with the foreclosure company and pay off loan.
Now $6,000 is due back to me after secondary attorney fees after funds were deposited in the county clerks office from the sale.
I am now being warned that from this transaction the following could be my responsibility with the IRS if not done correctly because of bank filing to the IRS.
$155,000 purchase price.
$116,000 owed on loan
$39,000 difference is now considered income and can be tax liable. Even though most of the money was taken by the bank.
I cannot claim interest paid , due to the loan being defaulted on.
I am trying to get a straight answer on this I seem not to get a straight answer from anyone.
Just seeking advise
Fred
House was foreclosed on and auctioned off. then received a 1099-A form from the bank. stating :
Balance of Principal = $116,000 ( Approximate)
Fair market value of property = $97,000 ( approximate)
box checked that Debtor was responsible for repayment of debt.
Loan was completely satisfied through the sale and residual is still due to me. ( Approx $6,000)
But the actual transaction was as follows.
Home sold at auction for $155,000
actual balance including interest and fees was $139,000.
$147,000 was taken to cover all expenses with the foreclosure company and pay off loan.
Now $6,000 is due back to me after secondary attorney fees after funds were deposited in the county clerks office from the sale.
I am now being warned that from this transaction the following could be my responsibility with the IRS if not done correctly because of bank filing to the IRS.
$155,000 purchase price.
$116,000 owed on loan
$39,000 difference is now considered income and can be tax liable. Even though most of the money was taken by the bank.
I cannot claim interest paid , due to the loan being defaulted on.
I am trying to get a straight answer on this I seem not to get a straight answer from anyone.
Just seeking advise
Fred