The 1099 form is just the starting point for reporting cancellation of debt income. This is one time that hiring a professional tax return preparer who is familiar with the rules can be a worthwhile investment.
Tax tips and developments relating to real estate
Starting with 2009 federal income tax returns, taxpayers will be required to attach certain documents in order to claim the New Homebuyer Credit. A new credit of up to $6,500 is available to taxpayers who have lived in a residence for more than five years, but they might have trouble finding documents to prove their residence during the five-year period.