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I hope you can help me... this is kind of confusing.
Basically we had to short sell our home last year. I've been doing daycare since 2006. We are now renting a home. I recently received a 1099-C related to our short sell with the "cancellation of debt" amount being listed on the form. Everything I've read online with the IRS says that we would qualify for the "debt relief act" since the home was our primary residence and we never refinanced.
Anyway today I went to HR Block to do our taxes. The lady was telling me that the amount of 'canceled debt' (@ $150,000) would show up as income that we made even though we didn't receive any of that money. I told her that I thought we would be covered by the debt relief act and she told me that I wouldn't qualify for that because I ran a business from that home and made my income I claimed from working in that home. She basically told me to go home and find all receipts or proof of money that we spent to improve the old house from 2006 till the short sale in 2011. So I did... and I follow up to finish the taxes this coming Monday.
I just don't understand why we wouldn't qualify for the mortgage debt relief act just because I worked at that home? I'm going to call the IRS help line Monday morning, but wondering if you know anything about this? I am really stressing out and would appreciate all and any advice! Thank you!!!!
Basically we had to short sell our home last year. I've been doing daycare since 2006. We are now renting a home. I recently received a 1099-C related to our short sell with the "cancellation of debt" amount being listed on the form. Everything I've read online with the IRS says that we would qualify for the "debt relief act" since the home was our primary residence and we never refinanced.
Anyway today I went to HR Block to do our taxes. The lady was telling me that the amount of 'canceled debt' (@ $150,000) would show up as income that we made even though we didn't receive any of that money. I told her that I thought we would be covered by the debt relief act and she told me that I wouldn't qualify for that because I ran a business from that home and made my income I claimed from working in that home. She basically told me to go home and find all receipts or proof of money that we spent to improve the old house from 2006 till the short sale in 2011. So I did... and I follow up to finish the taxes this coming Monday.
I just don't understand why we wouldn't qualify for the mortgage debt relief act just because I worked at that home? I'm going to call the IRS help line Monday morning, but wondering if you know anything about this? I am really stressing out and would appreciate all and any advice! Thank you!!!!
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