Description:
This book is for preparing 2024 taxes. Sometimes taxpayers find themselves unable to repay their mortgage debt, credit card debt, or other types of debt, such as student loans. In certain situations, the lender or creditor may decide to cancel all or a portion of the debt. In addition, as a last resort, banks may take ownership of the property securing mortgage debt by means of a foreclosure. Naturally, these events are emotional for taxpayers, and they look to their tax professional for guidance.
This course guides tax professionals through the tax consequences of foreclosures and debt forgiveness. It begins by explaining how to report property taken by the bank in a foreclosure on the debtor’s tax return. Then it covers whether the taxpayer has any cancellation of debt income (CODI) for various types of debt and the applicable reporting requirements. It wraps up by exploring when CODI is nontaxable or may be excluded from the taxpayer’s gross income and the tax effects of such exclusion.
Topics include:
- Applying information from Form 1099-A, Acquisition or Abandonment of Secured Property, when reporting a deemed sale of property
- Determining if debt is recourse or nonrecourse
- Identifying when lenders must issue Form 1099-C, Cancellation of Debt
- Determining whether CODI is taxable or nontaxable
- Completing Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)
Product Details:
Item Number: E24338
Level: Basic
Authors: NATP Staff
Published: 2024
Format: Electronic PDF - 77 pages
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Corresponding CPE Courses:
Get this e-book FREE when you purchase the corresponding 2024 course.
Purchase Info:
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