How Do I Know if a 1099-C Has Been Issued? – Nancy

We had a house go into foreclosure last year, the house was in our separate names as we were not married, and live in Washington State.

I did have a lawyer after the fact trying to keep us out of court for another matter relating to this.

From what the lawyer said, because Washington is a non-recourse state, the bank got the house back as is, and they couldn’t come after us for the remaining debt.

We are now living in a temporary space and have a PO box but before getting the box, a lot of our mail was messed up and not forwarded properly, so we don’t know if we could have gotten a 1099-C or not.

If the banks that issue these are required to also report it to the IRS, is there a way to check?

If we check, and they know our location, will that open a whole new can of worms to new litigation on the part of the bank? Apprehensive at the thought of even filing a tax return this year. Thanks for your help.


Dear Nancy,

The only way to check is to either contact the bank or assume the IRS was notified as required.

If you elect to proceed as if the 1099-C was not sent and in fact it was, it could generate some less than wanted IRS attention. You should really talk to a qualified tax professional for help with your taxes that would include this debt cancellation.

But all is not lost. According to the IRS:

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

But you mentioned that you had a non-recourse loan. In that case the IRS says forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.

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However, it may result in other tax consequences.

There are two possible consequences you must consider:

  • Taxable cancellation of debt income.
  • A reportable gain from the disposition of the home (because foreclosures are treated like sales for tax purposes).(Note: Often some or all of the gain from the sale of a personal residence qualifies for exclusion from income.)

Use the following steps to compute the income to be reported from a foreclosure:

Step 1 – Figuring Cancellation of Debt Income (Note: For non-recourse loans, skip this section. You have no income from cancellation of debt.)

  1. Enter the total amount of the debt immediately prior to the foreclosure.___________
  2. Enter the fair market value of the property from Form 1099-C, box 7. ___________
  3. Subtract line 2 from line 1.If less than zero, enter zero.___________

The amount on line 3 will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions in question 2. Enter it on line 21, Other Income, of your Form 1040.

Step 2 – Figuring Gain from Foreclosure

  1. Enter the fair market value of the property foreclosed.For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure ________
  2. Enter your adjusted basis in the property.(Usually your purchase price plus the cost of any major improvements.) ____________
  3. Subtract line 5 from line 4. If less than zero, enter zero.

The amount on line 6 is your gain from the foreclosure of your home. If you have owned and used the home as your principal residence for periods totaling at least two years during the five year period ending on the date of the foreclosure, you may exclude up to $250,000 (up to $500,000 for married couples filing a joint return) from income. If you do not qualify for this exclusion, or your gain exceeds $250,000 ($500,000 for married couples filing a joint return), report the taxable amount on Schedule D, Capital Gains and Losses. – Source

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I hope that at least gets you headed in the right direction. As I said before, find a tax professional to assist you with your return. I’m not that guy.

Please post your responses and follow-up messages to me on this in the comments section below.


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2 thoughts on “How Do I Know if a 1099-C Has Been Issued? – Nancy”

  1. I never got a 1099-c for the short sale of my only resident property. I do have a letter of forgiveness of the debt. There was only one loan on the property and we lived in it full time, in Florida.  I am not sure how to file a 982 form with out the 1099c? But, I am uncomfortable not disclosing the information in my tax filing this year. I have contacted the bank twice but have gotten no feedback.

  2. Nancy- you have three options:

    1. Call the lender and ask- they will provide you the answer
    2. Wait until you receive it- it is due to be mailed to you by Jan 31- you should recieve it by the end of the first week in February- if the lender has your correct address
    3. Ask the IRS around May 28th of this year- you can order a “wage and income” transcript from the IRS that lists all info statements, including 1099-C, filed on your SSN. This will require you file an extension.

    I hope this helps.



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