1099-C Short Sale; Fair Market Value 0

[HaroldinGeorgia]

Client has a short sale of residence; received 1099-C showing Box 2 amount of debt discharged as $135,383; Box 7, Fair Market Value as "0". I have copies of the closing statement showing the home was sold for $170,000; mortgage payoff as

$155,352. Loan discharged as $135,383.

I am using Form 982 for the debt forgiveness. Should I report the sale of Sch D?

If so what is the selling price.

Thanks in advance.

[Pacun]

Use adjusted basis and $170,000 as the selling price. I believe the amount owed to the bank(s) was $305,383 and that's why 1099-C shows that amount.

Your client should have the documents sign at short sale to list some figures.

If the short sale happened in 2012, you must report the sale on Sch D and since you have a 1099-C you have to use form 982.

[HaroldinGeorgia]

Thanks, Pacun.