Reporting Cancellation of Debt Income For Co-Obligors
have a client that purchased property secured by a mortgage with her daughter as joint tenants in common in Florida. However, the daughter uses the property as her principal residence, but not the mother. Unfortunately, they were underwater on the property and the mortgage was relieved in part. As such a form 1099-C was issued to both the owners for the full amount relieved. How should this be reported so that they both are not taxed and they can exclude it via IRC Section 108(a)(1)(E)?