If you get a loan modification your primary residence and your principal is reduced, you will receive a 1099-C. I believe that this is not taxable to the IRS, what is the rule for California? Is it taxable and if so, are there any exceptions?
Yes taxable to CA. Mortgage debt relief forgiveness ran out at the end of 2008 in CA. Only exceptions are bankruptcy and insolvancy. There was a bill on the floor in Dec. we all thought would pass to extend the bill, but it did not. Tell your taxpayer to write & WRITE, to call & CALL their congressman.
Thank you very much. In the same situation the tax payers received two 1099-Cs with the same debt canceled figure because both their names were on the loan. each 1099-c was issued with their corresponding Social Security number. How do i deal with that? Do i only report it on one return and notate the other?
