TP and SP were both listed on a mortgage for their primary residence, in CT. The house was built in 2001 for total cost of $505,000 and they lived their until 2019 when they divorced. The SP was allowed to live their following divorce but the legal ownership remained in both of their names as did the mortgage. The TP moved out and lived elsewhere in all future years.
In 2022, the bank foreclosed on the property and issued a 1099-A, in his SSN, for $389,000 which was the remaining amount of their mortgage. 1099-A shows FMV of $339,000 although actual FMV is between $550k-$600k. Am I correct on the following treatment:
1. TP basis in the property is $505k, less $389k debt cancellation, results in loss of $116k.
2. Property is in CT which is a non-recourse state.
3. Since property is personal use so loss cannot be taken on Sch D.
Do I even have to report the 1099-A at all anywhere on the return since it's non-recourse and personal loss?