Recvd 1099-A, foreclose retal prop from mortgage company. Form 4797 is the right form. any acct in houston,tx,

Question

Please send any accountant who can help with this issue. Thank you.

Answer 1

In theory, the property may have sold for more than the bank was owed. Then they need to get the "profit" to you.  With a 1099.  Most likely the bank lost money. They have the right to report this to the IRS.  You owed them money and they didn't get it.  So they are reporting a "Forgiveness of Debt" to the IRS.  The law was changed in June so they couldn't do this if you lived in the house as your primary residence. So it was good that you mentioned in your question that this is a rental property.  You can talk to the IRS at 800-829-1040.  They are very helpful. .