What is Form 1099-A
Published on July 09, 2025
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What to do after foreclosure or repossession abroad?
If you live outside the US and have gone through a foreclosure or repossession on a US property, you may still have tax obligations related to the cancellation of your debt.
Form 1099-A, issued by the IRS, is used when a lender takes ownership of a property due to foreclosure, repossession, or abandonment. This form helps the borrower and the IRS determine whether there is a taxable gain or loss from the transfer of the property.
Lenders must send Form 1099-A to borrowers if they acquire the property or the borrower abandons it. This form is important because it provides details about the property’s fair market value (FMV) and the remaining loan balance, which helps determine whether the borrower may owe taxes on canceled debt or need to report a capital gain or loss.
If you live outside the US, check if your current country taxes canceled debt as income.
What is the purpose of Form 1099-A?
Form 1099-A is used to document when a borrower loses ownership of a property because they couldn’t keep up with loan payments. The form allows the IRS and the borrower to track whether the loss of the property creates a tax obligation.
The form helps borrowers determine:
- If they need to report a gain or loss on their tax return.
- Whether they will receive a separate Form 1099-C, which reports canceled debt that may be taxable.
- If they qualify for tax relief, such as an exclusion for canceled debt under special IRS rules.
How and when do I receive Form 1099-A?
You will receive Form 1099-A if your property is foreclosed, repossessed, or surrendered to a lender. Lenders must send this form by January 31 of the following year after taking the property.
You may receive Form 1099-A if:
- Your home was foreclosed because of missed mortgage payments.
- You gave up the property voluntarily to avoid foreclosure.
- You abandoned the property, meaning you left it and stopped making payments.
Some borrowers also receive Form 1099-C, which reports canceled debt. If a lender forgives part of the remaining loan balance, that amount might be considered taxable income, unless you qualify for an exception, such as bankruptcy or insolvency.
Because Form 1099-A affects how you report gains, losses, or debt cancellation, it’s important to review the form carefully and, if needed, consult a tax professional.
What information is included on Form 1099-A?
Form 1099-A includes important details that determine whether you owe taxes after a foreclosure or repossession.
Here’s what each section of the form means:
- Box 1 – The date the property was taken back.
- Box 2 – The remaining loan balance when the lender took the property.
- Box 4 – The fair market value (FMV) of the property, which helps decide if you made a gain or loss.
- Box 5 – Indicates whether the loan was recourse or non-recourse, which affects tax liability.
- Box 6 – A brief description of the property, including its location.
This information helps you figure out if you need to report a gain or loss on your tax return. If the loan balance is greater than the FMV, you may also have to deal with canceled debt income, depending on your situation.
How do I file Form 1099-A?
If you receive Form 1099-A, you do not need to file it yourself, but you must use the information when reporting foreclosure, repossession, or canceled debt on your tax return.
Here’s what to do:
- Check the form to make sure all details, including the loan balance and fair market value, are correct.
- Determine if you need to report a gain or loss based on the fair market value compared to what you owed.
- Check for canceled debt – If you also receive Form 1099-C, the forgiven loan amount may be taxable income, unless you qualify for an exemption.
- Report the required information on your tax return – Gains or losses from property transfers usually go on Schedule D of Form 1040.
For lenders, Form 1099-A must be filed with the IRS electronically if issuing 250 or more forms. Otherwise, it can be mailed.
Since foreclosures, repossessions, and canceled debt can be complicated, it’s a good idea to talk to a tax professional to make sure you handle it correctly.
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Who is required to file Form 1099-A?
Lenders, banks, and financial institutions must file Form 1099-A when they take back a property because of foreclosure, repossession, or abandonment. This form informs both the IRS and the borrower about the transfer of property ownership.
The following lenders typically file Form 1099-A:
- Mortgage lenders and banks when a home is foreclosed due to missed payments.
- Credit unions and financial institutions if they repossess a car or other property used as loan collateral.
- Private lenders or loan companies that provided secured loans backed by property.
Lenders must send:
- Copy A to the IRS.
- Copy B to the borrower.
- Copy C for their own records.
If the lender also cancels the remaining debt, you may receive Form 1099-C in addition to Form 1099-A. This is important because canceled debt may sometimes be considered taxable income.
How do I report Form 1099-A on my tax return?
If you receive Form 1099-A, you may need to report the property transfer on your tax return. Whether or not you owe taxes depends on whether you gained or lost money when the property was taken back and whether any remaining debt was forgiven.
Steps to report Form 1099-A on your tax return:
- Check if you also received Form 1099-C – If the lender forgave part of your debt, you might need to report it as canceled debt income.
- Determine if you made a gain or loss – Compare the fair market value (Box 4) with the amount you still owed (Box 2).
- Report the transaction on Schedule D (Form 1040) – If the property was a home, rental, or business property, list the sale price, loan balance, and any capital gain or loss.
- Check if state taxes apply – Some states require you to report foreclosures and repossessions separately.
If you’re unsure how to report Form 1099-A, consulting a tax professional can help you avoid IRS issues.
How does Form 1099-A affect my taxes?
- Capital Gains or Losses – If the fair market value (Box 4) is higher or lower than what you originally paid for the property, you may need to report a gain or loss on your tax return.
- Canceled Debt Income – If the lender forgave part of your remaining loan balance, that amount might be considered taxable income, unless you qualify for an exclusion (such as bankruptcy or insolvency).
Key factors that impact your taxes:
- Type of loan – If your loan was non-recourse, the fair market value is treated as the final sale price, and the forgiven debt is not taxable. If it was a recourse loan, you may have to report the forgiven debt as income.
- IRS guidelines – Publications like Publication 4681 and Publication 544 explain how to handle foreclosures and debt cancellation on tax returns.
What should I do if I receive an incorrect Form 1099-A?
- Contact the lender – Let them know about the mistake and ask for a corrected form.
- Check important details – Make sure the loan balance (Box 2), fair market value (Box 4), and property description (Box 6) are accurate.
- Request a revised Form 1099-A – The lender must issue a new form and send it to both the IRS and borrower.
- Correct your tax return if needed – If the IRS already received the wrong information, attach an explanation statement when filing.
- Consult a tax professional – If the lender refuses to correct the mistake, a tax expert can help you report the correct numbers and avoid IRS penalties.
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