1099 and taxes

[CastelF]

I settle a second mortage with Aqcura, I stated that I wanted a letter that it was paid in full and get a full release on the lien, I just recieved these things in the mail, says paid in full, release of lien etc.

But I also recieved a 1099 in the mail, do i have to claim this on my taxes as income even though I recieved a paid in full letter..

Anyone know, Thanks..

[jq26]

1099 has nothing to do with "paid in full" or not. The 1099 is between you and the IRS. The 1099 is legit if you paid less than the face value of the original contract on the second mortgage.

However, you may not have taxable income because of it. Check Publication 941. If you received the 1099 for year 2011, you could always hire a good accountant this year to file your return. If the 1099 is for year 2012, then it wouldn't impact you until April 2013.

[2ndTimeAround]

Originally Posted by jq26

.... If the 1099 is for year 2012, then it wouldn't impact you until April 2013.

You received a 1099-C which is for cancellation of debt. Which was the difference of the original amount owed and what your 2nd mortgage was settled for.

Cancellation of debt is treated as income. If you settle last year, yes you need to include with this years taxes.

jq26 is correct - if it's a 1099-C 2012, waiting to file it next year. In the upper right hand cover, it will show the year it is for.