I have recieved form 1099-A. How do I calculate the values.Box 2 is greater than 4.Please advice?
This is treated as if you sold the property to the lender. The answer depends on what it says in box 5 under “Was borrower personally liable for the debt?” If the “no” box is checked, then you report the transaction on Schedule D (or Form 4797 if this is business property). You list the sale price as the amount shown in box 2. Your basis is the amount you paid for the property plus any improvements minus any adjustments required by law. You do not have any ordinary income or cancellation of debt income. Remember that you cannot claim a loss on sale of personal use property. See the section called “Amount realized on a nonrecourse debt” in Publication 544: http://www.irs.gov/publications/p544/ch0… If the “yes” box is checked, it’s more complicated. First you must report the sale of the property on Schedule D (Form 4797 for business property). In this case, your sales price will be the amount in box 4. I
