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Client received a 1099 A- from a short sale of a commercial property. 1099 A- details-
Box 1 -8/12/2016- Box 2- balance of outstanding principal $1,503,822.00 -Box 4 FMV- 0.00 - Box 5- blank- Box 6- commercial mtge.
Our basis in the property as of 8/12/2016 is 1,488,251.00.
Client did a short sale we have a final closing escrow statement for $450,000-the property was leased to Rite Aid, they paid $ 500,000.00 towards the sale price for early lease termination. Our estimated outstanding loan balance was around the same amount as in box 2- except for our reserves of $ 120,000.00 which was kept by the lender and not applied against the mortgage. Our sale price would be the 450,000+500,000+120,000 =1,070.000. What figure should we report for the tax return? I called the bank and was told that no 1099 C would be sent nor would they provide us with detailed statement re disbursement of our reserve balance. The loan was never in default,since the shortsale was completed before the note was due. Since Box 4 is -0- should we use our numbers as a FMV?