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ruckerart
ruckerart
Level 1
posted
‎June 3, 2019 10:51 AM
last updated ‎June 03, 2019 10:51 AM

On form 1099 c, cancellation of debt, do I pay taxes on the full amount in box 2 or on the amount after subtracting the fair market value of the property in box 7?

The property was also rental property. And the identifiable event code is G - decision or policy to discontinue collection

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FaithY
FaithY
Level 3
‎June 3, 2019 10:51 AM

On form 1099 c, cancellation of debt, do I pay taxes on the full amount in box 2 or on the amount after subtracting the fair market value of the property in box 7?

If property that is repossessed or foreclosed on secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the fair market value of the property. Report the income from cancellation of a debt related to a rental activity as rental income.


https://www.irs.gov/pub/irs-pdf/p544.pdf

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ruckerart
ruckerart
Level 1
‎June 3, 2019 10:51 AM

On form 1099 c, cancellation of debt, do I pay taxes on the full amount in box 2 or on the amount after subtracting the fair market value of the property in box 7?

What form or schedule do I report this on?
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