Q: I received cash for keys last year. I got a 1099 from lender w/a chk in box 3. Do I have to claim this on my taxes?
I filed for bankruptcy in 2009. Last year BofA worked out cash for keys so I could move out of the house. This year I received a 1099 with a check mark in box 3. Do I have to claim this on my taxes? Are there any precedents that homeowners do not have to claim this as income?
A: Income is "Income from any source." If the income could be a settlement for a foreclosure, you might treat it was a return of equity. Consult your tax advisor. But, if this was the normal cash for keys, and you were a tenant, it is income.
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