Tuesday, March 23, 2010

1099 on Short Sale Transaction

1099, short sale in az, bank of america

A while ago I have posted a blog in reference of doing short sale with Bank of America (“Short Sale with Bank of America....again”). In result person in charge who did take a look at my file contacted me and I have successfully closed 30 days later. So, I thought that is it. Transaction closed, paperwork filed away.

But no, not so fast…Last week, I have received a phone call from my concerned Seller trying to file the taxes. My client, advised by his CPA, needs 1099 form that should be furnished by Bank of America. The COE occurred on 12/21/2009. The closing date that Bank of America has in a system shows 01/04/10, and based on that, 1099 will be sent in 2011.

I emailed back and forth to the negotiator the copy of city tax record (which is a public information) promptly showing sale date on 12/21/10, but without any positive outcome. Bank of America states that there is nothing they can do at this time, because they cannot override their system date, and it is up to my Seller and his CPA how they are going to address the issue.

Maybe I am missing something here (certainly I am not a tax accountant), but isn’t against the law? Bofa received and collected funds from the sale in December 2009, when closing has happened. By changing a closing date in their system (intentionally or not intentionally) Bofa has violated IRS rules.

I appreciate any input on if someone may have a piece of advice.

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