Discussion:Timing of abandonment/COD income

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Discussion Forum Index --> Advanced Tax Questions --> Timing of abandonment/COD income


Discussion Forum Index --> Tax Questions --> Timing of abandonment/COD income

Floridataxmgr (talk|edits) said:

13 October 2010
I have a client that had several rental properties foreclosed on in late December 2009. He only received one Form 1099-A, and no 1099-C's. Should he claim abandonment losses on all the properties in 2009 and then claim the COD income in whatever year he receives the 1099-C? Or can he wait to claim the losses when he finally receives the 1099-C, thereby offsetting the two? As a side note, we have other clients that were foreclosed on in 2008 and still have never received a 1099-C, so I don't know whether banks are so overwhelmed with foreclosures that 1099 filings are slipping through the cracks?

Trillium (talk|edits) said:

13 October 2010
While you're waiting for responses, please review these discussions from the archives, which cover similar questions: Search "1099-C" "no 1099-A".

Be sure to start reading from the bottom of the search results to get the discussions started most recently.

DaveFogel (talk|edits) said:

13 October 2010
"I have a client that had several rental properties foreclosed on in late December 2009."

Abandonment and foreclosure are different. If the rental properties were lost to foreclosure, then the transaction is treated as a sale. The "amount realized" is the portion of the debt that was satisfied with the fair market value of the property.

Whether and when the lender will cancel the balance of the debt at a future time is uncertain. It will have to be dealt with at that time.

As I have said in many other discussions on this board, don't infer anything from the non-receipt of a Form 1099-A or 1099-C, and don't rely on the information on these forms because, from my experience, the information is frequently wrong.

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