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how to form 1099 a

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Attention: Copy A of this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. The official printed version of Copy A of this IRS form is scannable,
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Who needs a 1099-A form?

1099-A form is the United States Internal Revenue Service form that is officially called the Acquisition or Abandonment of Secured Property. It is to be filled out by lenders involved in lending trade or business and who have acquired an interest in property that was security for a loan or who have reason to know that such property has been abandoned.

What is the form 1099-A for?

By filing the Acquisition or Abandonment of Secured Property form, lenders are to inform all their borrowers of reportable income or loss due to an acquisition or loss. For the borrower, gain or loss is calculated based on the difference between the borrower’s adjusted basis in the property and the amount of debt canceled in exchange for the property or sale proceeds. If the borrower has abandoned the property, they may have income as the result of an indebtedness discharge in the amount of the unpaid balance of the canceled debt. The tax consequences of such an action are determined by whether the borrower was personally liable for the debt. Losses on acquisitions or abandonments of property held for personal use are not deductible.

When is form 1099-A due?

The lender (or the bank) must deliver the borrower's copy of the 2016 Form 1099-A by the end of January, 2017. And the the Department of Revenue Service form must be submitted the last day of February, which is February 28th in 2017.

Is the 1099-A form accompanied by any other documents?

When sending the form to the borrower there is no need to accompany it with any other forms, but when filing with the IRS, form 1096 must be attached.     

How do I fill out form 1099-A?

On all copies (there are three of them), the lender must provide the following information:

Their business name and address;

FIN (Federal Identification number);

Name and identification number of the borrower;

  • The borrower’s address;

  • Account number;

  • Date of the acquisition or abandonment;

  • Principal outstanding balance;

  • The property market value;

  • The property description.    

Video instructions and help with filling out and completing how to form 1099 a
Instructions and Help about 1099 were gov form
in this tax layer training video will discuss forms 1099 a acquisition or abandonment of secured property and 1099 see a cancellation of debt the objectives of this training video are to distinguish between the forms 1099 a abandonment in 1099 C cancellation of debt will determine if there is taxable income to report we'll talk about completing the form 982 reduction of tax attributes due to discharge of indebtedness we'll talk about how to enter a few examples in the tax layer protests top software first some definitions and terms a foreclosure is when a borrower in default is deprived of his or her interest or rights in a mortgaged or secured property this is often a lengthy and expensive legal process and the laws and procedures can vary from state to state the lender regains possession and control over the secured property or again a repossession for tax purposes a foreclosure is treated as a sale of the property so the borrower will have a realized gain or loss abandonment occurs when a borrower voluntarily and permanently gives up possession and use of the property with the intention of ending his or her ownership there's no direct conveyance to the lender an abandonment is also considered to be a sale or exchange of property for income tax purposes an abandonment is most often reported on form 1099 a voluntary conveyance voluntary surrender of property to a lender in exchange for full or partial discharge of the debt it secures is considered voluntary conveyance it's not considered to be an abandonment it's also considered to be a sale or exchange of property for income tax purposes it's an alternative to the foreclosure process as tax preparers our main function is to help our clients understand what's going on on the tax return what are the documents mean that they've received in the mail on the other side of the desk the clients perspective on foreclosures we probably heard phrases like this the bank just took my house I don't understand the whole paperwork process I just don't want to deal with it they just kicked us out and again it's our job as prepares to help the client understand what's going on on the tax return and how to report a 1099 a or 1099 see that the client may have received in the mail form 1099 a box one indicates the date of sale in other words the date of the lenders acquisition or the knowledge of abandonment that's why we have sale in quotations box two indicates the amount owed or the balance of principal outstanding box four indicates the fair market value on the date of the quote sale this is the gross foreclosure bid price box five indicates if this was a recourse loan if this box is checked the borrower was personally liable for repayment of the debt box six gives a description of the property now we talked about recourse debt on that form just a moment ago so what's the difference between recourse and non recourse debt well recourse debt the borrower is...
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