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Real Estate Property Foreclosure and Cancellation of Debt ATG

Publication Date - February 2015

NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.

Table of Contents

Chapter 1: Overview

  • Purpose
  • Brief History
  • Exceptions
  • Definitions
  • Key Tax Issues

Chapter 2: Type of Debt

  • Nonrecourse and Recourse Debt
  • Gain and Loss Computation and Cancellation of Debt Income

Chapter 3: Income from Discharge of Indebtedness

  • Bankruptcy
  • Insolvency
  • Qualified Farm Indebtedness
  • Qualified Real Property Business Indebtedness
  • Qualified Principal Residence Indebtedness
  • Audit Techniques

Chapter 4: Tax Attribute Reduction

  • Reduction of Tax Attributes
  • Depreciation Recapture Reductions
  • Summary of Tax Attribute Reduction Rules
  • Bankruptcy, Insolvency, and Farm – Attributes Reduction
  • Qualified Real Property Business Indebtedness–Attributes Reduction
  • Qualified Principal Residence Indebtedness - Attribute Reduction

Chapter 5: Rental Real Estate Property

  • Introduction
  • Qualifying Dispositions under IRC §469(g)
  • Non-qualifying Dispositions under IRC §469(g)
  • Depreciation Recapture
  • Character of Property at Disposition
  • Lease with Option to Buy Property
  • Rental Audit Strategies

Chapter 6: Tax Consequences of Abandonments

Chapter 7: Form 1099-A and Form 1099-C

  • Background
  • Examination Considerations
  • Inaccurate or Questionable Forms 1099-A and 1099-C

Chapter 8: Community and Common Law Property

  • Community and Common Law Property Systems
  • Community Property

Chapter 9: Audit Strategies

  • Summary of Real Estate Property Audit Strategies
  • Case File Documentation
  • Standard Paragraphs and Explanation of Adjustments
  • Job Aids
  • Resources for Real Estate Foreclosures and Cancellation of Debt Income

Chapter 10: Rehabilitation Credit and IRC §469

  • Background
  • Audit Hints

Chapter 11: Low Income Housing Credit

  • Low-Income Housing Credit
  • $25,000 Offset
  • Disposition of Passive Activity

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Page Last Reviewed or Updated: 16-Aug-2016