Long Island Foreclosure: 1099-A/1099-C

The Difference between a 1099-A and a 1099-C Form

Even after the stress of undergoing a foreclosure, a short sale, loan modification or deed in lieu of foreclosure, there is still the matter of taxes to complete. At times, lenders typically do not even understand these forms themselves as the taxes situation can prove to be an intricate ordeal. Complications may arise: a form might not be prepared for you, the form could be delivered to the address of the property you no longer own, or the form may not be delivered at all. Before dealing with either a 1099-A or a 1099-C form, there are some facts that are beneficial to know. If you or a loved one is struggling with foreclosure circumstances, reach out to a Long Island foreclosure lawyer to get questions answered.

Form 1099-A, also known as an Acquisition or Abandonment of Secured Property, contains information that details that can determine how much an owner has gained or lost. If a lender cancels part of the owner's debt, the lender is required to file Form 1099-C (a notice to the IRS that a financial institution has canceled or forgiven a debt of $600 or more) and to send the owner a copy if the lender is a federal government agency, a financial institution, a credit union, or any group that holds a notable trade or business of lending money. Both the 1099-A and the 1099-C forms should be sent to a foreclosed owner by February 1st of the following year.

Even though it is mandatory to record the amount of debt cancellation or forgiveness on Form 1099-C as income, the Mortgage Forgiveness Debt Relief Act states that taxpayers are permitted to exclude income from the discharge of debt on their principle residence.

Foreclosure Defense Attorney in Long Island

As many complications can arise from the tax portion after a foreclosure, it is paramount that you get help from a highly qualified lawyer. With a combined 50 years of experience, Blutter & Blutter is small enough to provide unique and individualized assistance while being large enough to tackle the more challenging cases. When you are facing a difficult instance of foreclosure, the firm is prepared to deliver aggressive and tenacious defense.

Get help with your 1099-A/1099-C forms today and contact a Long Island foreclosure defense attorney .