QUESTION
Does a 1099-C mean that they are going to take my home?
Asked on Feb 25th, 2015 on Taxation - Michigan
More details to this question:
I received a 1099-C from my mortgage company. It had an Identifiable event code of I in box 6. In box 2 the amount of $136,887.42 amount of debt discharged. Box 7 has the amount $21,000.
1 ANSWER
No, what it means is the IRS will be aware that you had some discharge of indebtedness income, so they will be looking for an income tax return that either includes this income or that explains why the income is not taxable. Of course, if there is taxable income, then you will need to pay the tax or the IRS will issue an assessment, place a lien on your assets, and, eventually, perhaps, levy (seize) assets to satisfy the tax liability.
Answered on Feb 26th, 2015 at 11:07 AM