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02-25-2010, 03:05 PM
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Form 1099A Abandonment Foreclosure Do I really have...
...to pay taxes on the diff between the FMV & my mortgage? The FMV of the house is listed as $88,000 and the loan is $217,000. The house was in my name. I filed bankruptcy and did not reaffirm the property. It is business debt. Do I have to pay taxes as if I had $129,000 ($217K-$88K) in income? I don't make enough to pay this much in taxes! I am so scared. Please help!
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02-25-2010, 04:56 PM
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For the Federal this is not included in income. You still have to report it though. For the state it depends on what state you live in. Friends in California have a huge tax bill right now because the state treats it as income and taxes it.
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