You can discuss this with the issuer of the 1099A, however it does not need to be reported on the return right now. It will if you get a 1099C however.
At this point you don't have to report the form 1099-A, as it's sale usually results in a loss and the loss on primary residence is not deductible. However, please keep if for your records.
Foreclosures may still result in taxable income. If your lender cancels or forgives the mortgage debt on a recourse loan, you may have to include this amount as income, unless certain exceptions apply.
You have already received Form 1099-A which reports foreclosure date, Fair Market Value of the property and the outstanding loan balance.
If the lender forecloses and cancels your debt in the same year, you most likely receive only form 1099-C, which will report how much debt was cancelled. That form will have to be reported on your tax return. It is possible that the form 1099-C will be issued in the next year or so... it will have to be reported in the year the form indicates.
Canceled debts that meet the requirements for any of the following exclusions or exceptions are not taxable:
· Debt canceled in a Title 11 bankruptcy case
· Debt canceled during insolvency (debts greater than your assets)
What if the bank holds on for 6 years and it was your primary residence? Do you still get the if the benefits of the Mortgage Forgiveness Debt Relief Act even if it no longer applies when the finally issue the 1099c.
Does the exclusion still apply since the foreclosure happened back when we qualified for 2 of the last 5 years?