ETax847 Posted April 7, 2015 Report Posted April 7, 2015 Taxpayer received a 1099-C for cancelled debt. This was her primary residence for 3 of the last 5 years, with the last 2 years it being a rental property. Does this taxpayer still qualify for the qualified discharged of principal residence indebtedness exclusion? Quote
Pacun Posted April 7, 2015 Report Posted April 7, 2015 No, but if he is insolvent, he qualifies to exclude that from income. You have to make an adjustment to the basis and enter that on form 982. Quote
ETax847 Posted April 7, 2015 Author Report Posted April 7, 2015 Thanks Pacun. Do you have a source to cite? Quote
Pacun Posted April 7, 2015 Report Posted April 7, 2015 (edited) I will post something, but wait for other to chime in. Edited April 7, 2015 by Pacun Quote
Pacun Posted April 7, 2015 Report Posted April 7, 2015 Based on the instructions for form 982, at the time of the cancellation of debt, that house was not the main home of your client. Another point to consider is where did he deduct the mortgage interest last year, sch E or A? Quote
Pacun Posted April 9, 2015 Report Posted April 9, 2015 I guess your asking for citation scared others and that's why no one has answered. My answer is correct but I don't have cite. Quote
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