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The bank foreclosed on Williams home and issued a form 1099A to him what is the...

The bank foreclosed on Williams home and issued a form 1099A to him what is the sale price that William must use if the outstanding balance on the request loan was 50,000 in the fair market value of the property was 42,000 on the date of the foreclosure


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It is necessary to determine sale price on form 1099A to calculate gain or loss on the disposal. Both outstanding loan balance and fair market value can be used as sales price. The selection of one depends on the type of loan, if its recourse loan or non-recourse loan. In case of recourse loan, the personal assets of borrowers are liable even after seizing collateral by lender, while in non-recourse, the personal assets of borrowers are not liable. For recourse loan, the sale price is equal to fair market value on the date of forecloser and the same is outstanding balance of loan in case of non-recourse loan. Generally, most loans are recourse loan and thus the sale price that William must use is $42000 (fair market value).

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