Get the free how to form 1099 a 2020-2021

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...