Where to Report Form 1099-A
If you’ve received IRS Form 1099-A—Acquisition or Abandonment of Secured Property—you may be wondering where and how to report it on your tax return. While the form itself doesn’t always result in taxable income, it often involves reporting a gain or loss from the transfer of property. The exact steps depend on whether the property was for personal or business use.
What Form 1099-A Reports
Form 1099-A is issued when a lender acquires property from a borrower due to foreclosure, repossession, or abandonment. It includes key details such as:
- Date of acquisition or abandonment
- Fair market value (FMV) of the property
- Outstanding loan balance
- Whether you were personally liable for the debt
This information is used to determine whether you have a capital gain or loss, which must be reported on your tax return.
Where to Report It
1. Personal Use Property (e.g., primary residence)
If the property was your main home, any gain or loss from the foreclosure is reported on:
- Form 8949 – Sales and Other Dispositions of Capital Assets
- Schedule D – Capital Gains and Losses
You’ll use the amount of the outstanding loan or the FMV (whichever is applicable) as your “sale price” and subtract your adjusted basis (what you paid for the home, plus improvements) to calculate the gain or loss.
Note: Losses on personal-use property like a primary residence generally aren’t deductible, but gains may be taxable if they exceed the exclusion limit (e.g., $250,000 for single filers).
2. Rental or Business Property
If the property was used for business or as a rental, report the gain or loss on Form 4797 – Sales of Business Property, here, losses may be deductible, and gains are typically taxable.
Additional Forms
If you also receive Form 1099-C for canceled debt, you may need to report cancellation of debt income on:
- Form 1040, Schedule 1
- Form 982 – Reduction of Tax Attributes (if you qualify for an exclusion)
Conclusion
Form 1099-A must be reported on your tax return, usually on Form 8949 and Schedule D, or Form 4797 if the property was for business use. Understanding how to use the form’s information ensures accurate reporting and helps avoid IRS issues.
Contact us today for expert assistance. Our dedicated team at Dimov Tax is ready to present professional aid with Form 1099-A.