principal residence indebtedness exclusion

[Bbweir]

With the new laws in affect, how do you do a amendment for a 1009C received in 2018? I received a 1099C for my house mortgage after a foreclosure, claimed on my 2018 return as income. I need to now amend my 2018 return since this law is retroactive for 2018.

[DMarkM1]

You probably don't need to amend your 2018 return.  According to the Mortgage forgiveness debt relief act.  For calendar years 2007 through 2019, you can exclude up to $2 million in forgiven mortgage debt if you were married and filing jointly—up to $1 million for other filing statuses. This exclusion applies to mortgage debt forgiven in connection with a foreclosure. 

Keep the 1099-C for your records.  The IRS received a copy as well and if they have questions they will write you letter.  Here is a link with some discussion on the form 1099-C. 

[Bbweir]

When I received that 1099 in 2018, I claimed it as income and had a bill to the IRS, which I paid. Wouldn’t I amend that to receive a refund for the tax bill I  paid? If the 1099 I received was for a cancellation of debt I should have claimed that as income on that 2018 return correct?

[DMarkM1]

Yes, you are correct.  If you got the 1099-C in time to file your 2018 return and included the income in your 2018 tax return, you can file an amendment to exclude that income.  Here is a link with instructions for amending a prior year return.