1. Maybe the amount due, including principle, interest, late charges, trustee fees, etc. Maybe not. Just a guess, and it wouldn’t be the right way to do it.
2. It’s not a yes or no question. The form says “Check here if the borrower was personally liable for repayment of the debt”
3. Because you had no debt forgiveness. (Simply put, from the lenders perspective, the foreclosure satisfied the debt.)
4. Remote.
5. Even more remote. Assuming the foreclosure was in 2010.
6. No

Lenders are not consistent on the way these forms are prepared. They are often prepared incorrectly. Based on this cursory information it would seem you shouldn’t incur any tax liability based on the foreclosure. If TurboTax agrees, go with it.

And no, the bank is not keeping the loan in limbo status. They have some flexibility with valuing delinquent loans. Once the foreclosure occurs, they must recognize the loss. Particularly if the REO was subsequently disposed of during the same year, they cannot delay recognition. What they used as FMV on your 1099 and how their valuing the asset in their records don’t necessarily have any relationship with each other. (Additionally, more likely than not, the “bank” did not own your loan, so loss recognition isn’t even an issue.)