Does Homeowner Get Deficiency Judgement Or 1099 If Their House Gets Sold At Auction Or Sold As REO
I assume the bank has to receive more or equal to what is owed on the property for the homeowner to be free & clear (long after the foreclosure) ?
The IRS states that gain or loss is the difference between the adjusted basis in the property and the amount realized through the property foreclosure, even if no cash is received in the foreclosure "sale" transaction a property owner still may face taxable income,
They may receive either a Form 1099-A or Form 1099-C, or both.
See:
IRS Publication 908
http://www.irs.gov/pub/irs-pdf/p908.pdf
IRS Form 982
http://www.irs.gov/pub/irs-pdf/f982.pdf
IRS Publication 537
http://www.irs.gov/pub/irs-pdf/p537.pdf
IRS Publication 523
http://www.irs.gov/pub/irs-pdf/p523.pdf
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Anyone out there know the correct answer regarding this tax exclusion issue? ie- from living in their house 2 out of the last 5 years..
The reason why I am trying to verify this is because I just came back from a seminar where they told me this was possible.