Odd 1099-A

[ILLMAS]

TP brought in the oddest 1099-A I have ever seen:

Box 1 has date of abandonment

Box 2 Show balance of principal outstanding (client owed more then 200K, but only $85 appears)

Box 5 Borrower was not personally liable for the repayment of the debt

And thats all, no FMV is show.

What to do?

[grandmabee]

maybe bank sold and that is what is left of the loan balance. not liable so no COD

[ILLMAS]

I think I should be a detective instead of an accountant, I had to do some digging around with the TP because this 1099-A didn't make sense, well it turns out there was more I wasn't told originally. TP had a line of credit on the investment property she lost to foreclosure, and she also had a loan. So here is what happened, Fannie Mae basically bought the loan (209K) and the remaining debt of the line of credit, the $85 was the only thing they didn't pay for, pretty good right? So at the end, the TP has a sales contract of 209K (Fannie Mae the buyer), the house was bought for more then the FMV, now here is a little problem, TP bought house for 134K, the adjusted basis is 110K, so would be safe to say she will have a gain if the house was sold for 209K-111K=98K, there was no bankruptcy, 100% investment property, rents were collected up the day the house was foreclosed. I had asked the TP to find out if the bank was going to issue a 1099-A for the loan, but the more I think about it, it sounds like if it was a sale between TP and Fannie Mae, your thoughts?

Thanks

MAS