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What is the difference between personal and non-personal debt on the section for 1099-c?

Is it considered personal debt or non-personal debt when receiving a 1099c on a home that had a deed in lieu of forclosure this year,  which was originally purchased as a main home 2003 and it became a rental property in 2008? 

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PhyllisG
New Member

What is the difference between personal and non-personal debt on the section for 1099-c?

Personal debt is simply a non-business debt.  Examples of personal debt are auto loans, student loans, mortgages, credit cards, etc.

A non-personal debt (business debt) is a debt acquired because of a profit motive and to fund a business.

The courts have determine that a home that is later used as a rental is still considered a personal debt.  It is the initial intent of the loan that determines the character of the debt.

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1 Reply
PhyllisG
New Member

What is the difference between personal and non-personal debt on the section for 1099-c?

Personal debt is simply a non-business debt.  Examples of personal debt are auto loans, student loans, mortgages, credit cards, etc.

A non-personal debt (business debt) is a debt acquired because of a profit motive and to fund a business.

The courts have determine that a home that is later used as a rental is still considered a personal debt.  It is the initial intent of the loan that determines the character of the debt.

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