Even if you or we already know the answer…
This is where you need to begin your analysis — form 982.
Things to Remember
1. Expiration… the Mortgage Debt Forgiveness acts (both FED and California) are scheduled to expire this year, so if you are considering a short sale or a foreclosure you may have to set up your plan and act fast, especially if you have recourse loans.
2. If you are not working with principle residences, you will have to consider other possible ways to exclude 1099 income.
3. If you have refinanced or taken cash out, in excess of your original debt, you may have to look for other ways to exclude your 1099 loan forgiveness income.
4. Speak to a lawyer about the effects of disputing the debt.
5. Consider the insolvency exclusion.
6. Consider Capital gains implications, few people do, but they should.
7. If you have rented out the property, you may have two different ways to exclude some or all of the 1099 income.
8. Don’t forget the California Franchise Tax Board.
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