How do you report a foreclosed rental property to the IRS?
I have a leasing in 2006 and 2007 and reported it to IRS.
In 2008 the property was foreclosed. Therefore, no rentals to report in 2008. I need to have closure to this transaction and let the IRS know that this leasing property no longer exixt. I would apreciate any help
You can enter to them preside over in DC.
A foreclosure is nothing more than a forced sale. The sales price is generally the amount of the outstanding mortgage on it. You report the disposal of a business asset on Form 4797. Don’t forget to subtract the depreciation allowed or allowable even as it was held as a leasing from your basis. This is right whether you took the depreciation or not when you were renting it out. The gain or loss is reported on Schedule D.
Did you do your taxes? You should have reported it on your taxes, and that way it gets reported to the IRS. It should be reported on a schedule E (rent and royalty income) You would place all the information in on the home, but you would check the box that says “property was 100% disposed of in 2008″).
no “closure” is needed – you just don’t report it for 2008 – there is no need to report anything that is zero income – business, rentals, etc.
Let’s place it this way. If you DON’T report the “sale” of the property, the IRS will figure your cost basis was zero and tax you on the full amount.