SANDRAO
Level 1
03-01-2022
06:27 PM
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Hello,
I have a situation that I would like to double check...
A client sold his house in 2021 and he had a loan cancellation of $70,000.00 in 2010 from his mortgage loan... at the time this was not taxable and it was reported to the IRS... does this affect his basis when I am reporting the sale of the house?
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TaxGuyBill
Level 15
03-01-2022
08:01 PM
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Probably?
If Basis is reduced, will the sale be taxable?
You should have the 2010 tax return and look at Form 982.
Norman2001
Level 7
03-02-2022
04:18 AM
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This is from 2010 Pub 523
Decreases to Basis
These include the following.
• Discharge of qualified principal residence indebtedness that was excluded from income (but not below
zero).
