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Level 1
posted May 2, 2020 11:41:05 AM

Proceeds from Foreclosure

I had excess proceeds from a foreclosure.  Do I report it as income?  How is it taxed?

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1 Best answer
Employee Tax Expert
May 7, 2020 10:49:25 AM

It depends.

 

The treatment would be dependent upon whether this was for a principle residence or a rental/investment property.

 

Please see the following link specifically for information as it relates to foreclosures.

Foreclosure treatment for taxes

 

Please see the following link for more details as to whether it would be taxable to you based upon the type of debt that was cancelled.

Tax treatment of debt cancellation

Form 1099-A treatment for taxes

 

1 Replies
Employee Tax Expert
May 7, 2020 10:49:25 AM

It depends.

 

The treatment would be dependent upon whether this was for a principle residence or a rental/investment property.

 

Please see the following link specifically for information as it relates to foreclosures.

Foreclosure treatment for taxes

 

Please see the following link for more details as to whether it would be taxable to you based upon the type of debt that was cancelled.

Tax treatment of debt cancellation

Form 1099-A treatment for taxes