Reporting a Home Foreclosure? You need Form 1099 A!
Who needs an IRS 1099-A form?
An IRS 1099 A form is needed by:
• Multiple owners of single loan: In case there are multiple owners of a single loan like fixed investment trust or pools, an IRS 1099-A form must be filed on behalf of all owners.
• Government lenders: A unit of the government that lends money secured by the foreclosed property must file a IRS 1099-A.
• Multiple lenders: In case one lender acquires or forecloses an interest in the property leading to the termination of the sale, a Form 1099-A must be filed for each lender.
What is IRS 1099-A?
Taxpayers are required by law to report the foreclosure just like it were a sale of the property. Form 1099-A is for Acquisition or Abandonment of Secured Property. If you received a Form 1099-A, the first thing you must do is determine whether there has actually been a cancellation of debt. The lender should have sent you a Form 1099-C Cancellation of Debt if any debt was canceled. If you have not received a Form 1099-C, you may want to contact your lender to determine if any debt has been canceled.
Is IRS 1099-A accompanied by other forms?
If you file a 1099 a, you need to fill out Form 1096 as well.
When is IRS 1099-A due?
File copies with the IRS by the end of February and a copy to the borrower by the end of January.
How do I file IRS 1099-A?
To file IRS 1099 A correctly, you’ll need to know the sale date and sale price of the property. You’ll also need to document the purchase date and purchase price; this information can be found in your escrow statements from when you first bought the house. For more information on how form 1099 A relates to form 1099 C, check out the following video:
Where do I send IRS 1099-A?
You send Copy A to the IRS, Copy 1 to the concerned state tax agency, Copy B and Copy 2 to the income recipient and Copy C is for your records.