Form 1099-A Instructions

IRS Form 1099-A is used by lenders to report when they acquire a secured property or when a borrower abandons secured property. This form helps the IRS track debts and property transfers connected to your trade or business.

What is Form 1099-A?

Form 1099-A is an IRS information return used by lenders to report when they acquire a secured property or when a borrower abandons secured property. This form helps the IRS track debts and property transfers connected to your trade or business.

Purpose of 1099-A Form

Coordination with Form 1099-C

Form 1099-A reports on acquisition or abandonment of secured property, while Form 1099-C reports on cancellation of debt. Sometimes, both events can happen for the same borrower in the same year—for example, a foreclosure that cancels a debt of $600 or more.

The IRS rules are:

What Property is Covered?

Property includes

• Real property or real estate property
• Intangible property
• Tangible property (business, trade or investment).

Who is required to file?

Lenders and entities are required to efile Form 1099-A when they acquire an interest in property or are involved in the foreclosure or abandonment of a loan. The rules include:

1099-A Filing Timeline

IRS Form 1099 a in the year following the calendar year when you:

• Acquire an interest in the property, or
• First know or have reason to know the property was abandoned.

Understanding Abandonment

Abandonment occurs when a borrower permanently discards property. You have “reason to know” based on facts discovered through reasonable inquiry.

Timing Rules:

• If a foreclosure, execution or similar sale is expected within 3 months, report as of the acquisition date or sale.
• If action takes longer than 3 months, report at the end of the 3-month period.

How to fill out 1099-a form?

Here are the step-by-step instructions to fill out Form 1099-A

Step 1: Enter the Lender’s information

Enter the Lender’s name, address, along with the ZIP Code and Taxpayer Identification Number (TIN)

Step 2: Enter the Borrower’s information

Enter the Borrower’s name, address along with the Zip Code and the Taxpayer Identification Number (TIN)

Step 3: Acquisition or Abandonment Information

Account Number

The account number is used to identify a specific loan or account for a borrower.

• If you are filing more than one Form 1099-A for the same borrower, you must include an account number for each form.
• Even if you’re filing only one form, the IRS encourages including an account number to help distinguish between different loans or accounts.

Box 1: Date of Lender's Acquisition or Knowledge of Abandonment

Enter the date the property was acquired or abandoned:

• Foracquisitions:
• Enter the date you acquired the property, which is usually the earlier of the date the title transfers to you or the date of possession and ownership rights transfer.
• If a legal objection period applies, record the date when that period ends.
• If you buy the property through a foreclosure or similar sale, use the later of the sale date or the borrower’s right of redemption expiration date.
• For abandonments:
• Enter the date when you first knew, or should have known, that the property was abandoned.
• If you intend to begin a foreclosure or similar process within 3 months, follow the timing rules discussed earlier.
• If a third party purchases the property at the sale, use the date of sale as the date of abandonment.

Box 2: Balance of Principal Outstanding

Enter the unpaid principal of the debt at the time you acquired the property or first knew it was abandoned.

Box 4: Fair Market Value (FMV) of Property

Enter the fair market value of the property:

• For a foreclosure, execution, or similar sale: Use the sale proceeds as the FMV unless there is clear evidence showing otherwise.
• For abandonment or voluntary conveyance to the lender: If you marked the box in Box 5, enter the appraised value of the property.
• Otherwise: Leave this box blank.

Box 5: Was Borrower Personally Liable for Repayment of the Debt

Check the checkbox, if the borrower was personally liable for repaying the debt when it was originally created or, if modified, at the time of the last modification.

Box 6: Description of Property

Enter ageneral description of the property:

• Real property: Provide the address. If the address isn’t enough to identify it, include the section, lot, and block.
• Personal property: Describe the type, make, and model (e.g., “Car—2024 Honda Accord”).
• Multiple items: Use a general category (e.g., “Office Equipment” for several desks and computers).
• Crops: Enter “CCC”for crops forfeited on Commodity Credit Corporation loans

Important deadlines for Form 1099-A?

Penalties for 1099-A form

👉 For more details, you can also refer to the information return penalties.

How to E-File 1099-A Form with TaxZerone?

Before you start e-filing Form 1099-A, make sure you have all the necessary information ready to ensure a smooth filing process.

Information required to be reported on 1099-A form:

• Lender information (name, address, TIN)
• Borrower details (name, address, TIN)
• Account number (if applicable)
• Date of acquisition or abandonment
• Balance of principal outstanding
• Fair market value of the property
• Borrower’s personal liability
• Description of the property

Steps to E-file Form 1099-A with TaxZerone

Step 1: Complete Form 1099-A

Choose Form 1099-A in TaxZerone and fill out all the required fields using the information you’ve gathered.

Step 2: Review and transmit the return

Double-check all the information for accuracy. After you have verified all the information, e-file form 1099-A with IRS.

Step 3: Provide the borrower copy

After the form has been successfully submitted to the IRS, provide a copy of 1099-A form to the borrower via ZeroneVault or postal mailing.