Check Your KnowledgeQuestion 4 of 4Gene bought his home in 2003. His basis in the home was $210,000. He lost his job in January of this year and was not able to make the mortgage payments. The bank foreclosed in August and Gene moved out. At the time of the foreclosure, the fair market value was $145,000 and the principal balance of the mortgage was $185,000. All of the debt was incurred to purchase the home, it was never used for business or as a rental, and Gene has not filed for bankruptcy. Gene has a Form 1099-C. Gene is personally liable for repayment of the debt. Click here to see Gene's Form 1099-C. How should the foreclosure and loss be reported? |