More bad news for investors that were a part of the real estate boom and bust.
1099-A Valuation Problem
It seems that the IRS is not only using Form 1099-A to assess cancellation of debt income. This is a major problem for investors because Form 1099-As are showing valuations that are incorrect in two ways. Either they are hundreds of thousands of dollars over valued or they are showing a valuation of zero. This is very troublesome for taxpayers that are being forced to pay taxes on cancellation of debt income that is incorrectly valued.
Banks Not Issuing Form 1099-C
The problem is banks are not issuing Form 1099-Cs to investors and since they are not the IRS is switching over to using Form 1099-As for valuation of cancellation of debt income. If this has happened to you it is best for you to contact an experienced tax attorney or CPA that can fight to have the bank issue a Form 1099-C so you are not being unfairly taxed on cancellation of debt income.