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Jabong Mailer (CPA)

Wednesday, 25 February 2015

I just received a 1099 for income I received from renting my townhouse. This income is less than the mortgage payments I paid. How do I file this on my federal and state income taxes? By the way, I had no choice but to rent the property because I am underwater. I owe $20,000 more than what the property is worth.

We’ve been hearing a lot about how the real estate market has improved all over the country. Unfortunately, there are still millions of homeowners who, like you, are either truly underwater with their mortgages or are what is known as “functionally” underwater, where the property is worth about the mortgage amount, but the homeowner would have to bring a check to the closing due to the costs of closing.

Bill Nemeth, an enrolled agent and partner in the Atlanta-based Tax Audit Guardian, notes that the 1099-MISC form you were sent has an entry in Box 1, Rents.

Read full story: Real Estate Matters | Renting out home has tax benefits for underwater owner

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