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10908: 1099-A - Data Entry


1040 Individual Data Entry

Where do I enter a Form 1099-A?
 

Use screen 99C to enter information about debt cancellation from Form 1099-C, Cancellation of Debt.

There is no specific screen for entering information from Form 1099-A, Acquisition or Abandonment of Secured Property. You will have to evaluate information reported on a Form 1099-A to determine whether and where it should be entered.

The taxpayer, when disposing of property, usually will have to file one or more of the following forms:

  • Schedule D, Capital Gains and Losses.
  • Form 4797, Sales of Business Property.
  • Form 8824, Like-Kind Exchanges.
  • Form 8949, Sales and Other Dispositions of Capital Assets

The two forms are described by IRS in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments:

"Forms 1099-A and 1099-C. A lender who acquires an interest in your property in a foreclosure or repossession should send you Form 1099-A, Acquisition or Abandonment of Secured Property, showing information you need to figure your gain or loss. However, if the lender also cancels part of your debt and must file Form 1099-C, the lender can include the information about the foreclosure or repossession on that form instead of on Form 1099-A. The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or other applicable entity as discussed earlier in chapter 1 [of this publication]. For foreclosures or repossessions occurring in 20XX, these forms should be sent to you by January, 20YY."

The tax consequences of abandonment of property that secures a debt depend on whether you were personally liable for the debt (recourse debt) or were not personally liable for the debt (non-recourse debt). See Publication 544, Sales and Other Disposition of Assets.

Recourse debt

If the taxpayer abandons property that secures a debt for which the taxpayer is personally liable (recourse debt) and the debt is canceled, the taxpayer will realize ordinary income equal to the canceled debt. This income must be reported unless one of the exceptions or exclusions applies. See the instructions with Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), and it is separate from any amount realized from the abandonment of the property. See Related Links below.

Non-recourse debt

If the taxpayer abandons property that secures debt for which the taxpayer is not personally liable (non-recourse debt), the abandonment is treated as a sale or exchange. The amount realized is the amount of the non-recourse debt. If the amount realized is more than the taxpayer's adjusted basis, then a gain has occurred. If the taxpayer's adjusted basis is more than the amount realized, then a loss has occurred. For more information on how to figure gain or loss, see Gain or Loss from Sales or Exchanges in Publication 544.

Loss from abandonment of business or investment property is deductible as a loss. The character of the loss depends on the character of the property. The amount of deductible capital loss may be limited. For more information, see Treatment of Capital Losses in Publication 544.

The taxpayer cannot deduct any loss from abandonment of a home or other property held for personal use.

More information on Forms 1099-A, 1099-C, and 982, and on related topics is available in Publication 4681 and Publication 544.


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