SS completed, but no 1099-c

Hello:

My Short Sale was completed from Chase back in late Dec 2012. I received my final HUD, but nothing from Chase, indicating that they will pursue the deficiency or will cancel the debt and issue a 1099-c.

My question is, who do I contact to see if a 1099-c was issued? IRS? Chase indicates that the ss has been competed, but will not offer any other information.

Thoughts are appreciated.

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Permalink Reply by Kevin - Greenville, SC on April 17, 2013 at 4:45am
Permalink Reply by David on April 18, 2013 at 7:21am

I just looked up the deed on the property and there is Certificate of Satisfaction, but here at work of course I can't view the document.

What does certificate of satisifaction mean?

Permalink Reply by Simon Campbell on April 19, 2013 at 1:34am

Even if you receive a 1099C, the IRS is not holding the recipient responsible for paying taxes on the "income." Here is why: 

On January 1st, Congress signed the H.R. 8, the American Taxpayer Relief Act of 2012. The mortgage cancellation relief for home owners or sellers who have a portion of their mortgage debt forgiven by their lender, typically in a short sale, foreclosure sale or loan modification is extended through 2013.

Additionally, deductions for mortgage interest, mortgage insurance premiums and state and local property taxes are extended. The exclusion from capital gains with the cap at $500,000 ($250,000 for individuals) remains in effect (subject to limitations).

 

Permalink Reply by David on April 20, 2013 at 1:39am

I finally received the letter and they do waive the right to pursue any deficiency.

"Any deficiency balance remaining on the loan secured by the above referenced property wil be waived." 

Now it's on to the taxable issue.

Thanks everyone.

Permalink Reply by Simon Campbell on April 24, 2013 at 1:23am

There is no tax on the amount waived by the lender. The Mortgage Relief Act was extended through 2013. This means that the IRS also waives their right to tax the forgiven debt received from homeowners who have gone through foreclosure and short sales.

Reference: http://tax.cchgroup.com/downloads/files/pdfs/legislation/atpr.pdf - See page 8.

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