Mortgage Debt forgiveness – Loan forgiveness – 1009 c: “Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.”

Please remember to consider capital gains and the taxation rules of the California franchise tax board in your pre-foreclosure analysis.