IRS Form 1099-A – IRS Form 1099-A, titled “Acquisition or Abandonment of Secured Property,” is an essential tax document used to report specific events related to secured loans, such as foreclosures or property abandonments. This form helps the IRS track potential taxable events for borrowers, like capital gains or losses from property dispositions. If you’re a lender, borrower, or tax professional dealing with real estate or secured debts, understanding Form 1099-A is crucial for compliance and accurate tax reporting. In this guide, we’ll cover everything you need to know about the form, including its purpose, filing requirements, and implications for taxpayers. Note that the version linked here (https://www.irs.gov/pub/irs-pdf/f1099a.pdf) is an “Info Copy Only,” meaning it’s for reference and not for official filing—always use official IRS-provided forms for submissions.
What Is IRS Form 1099-A and Its Purpose?
Form 1099-A is filed by lenders when they acquire an interest in a borrower’s property that secures a loan or when they become aware that the borrower has abandoned the property. This typically occurs in situations like foreclosures, deeds in lieu of foreclosure, or voluntary abandonments. The form informs the IRS and the borrower about the transaction, which may trigger tax consequences for the borrower, such as reporting the event as a sale or exchange of property on their tax return.
The primary purpose of Form 1099-A is to report the date of acquisition or abandonment, the outstanding principal balance, the fair market value (FMV) of the property, and whether the borrower was personally liable for the debt. Borrowers use this information to calculate any capital gains, losses, or canceled debt income on forms like Schedule D (Form 1040) or Form 982. Unlike some other 1099 forms, it’s not reporting income directly but rather a property transaction that could lead to taxable events.
Key scenarios where Form 1099-A applies include:
- Lender acquires property through foreclosure or similar proceedings.
- Borrower abandons the property, and the lender has reason to know about it.
- This applies to real property (like homes) or personal property (like vehicles or equipment) secured by loans.
It’s important to note that you don’t need to be a professional lender to file this form—if you lend money in your trade or business and the property is secured, reporting may be required.
Who Must File Form 1099-A?
Lenders, including banks, credit unions, governmental units, and even individuals or businesses that extend secured loans in their trade or business, must file Form 1099-A. You file it for each borrower if:
- You acquire an interest in the secured property in full or partial satisfaction of the debt.
- You know or have reason to know the property has been abandoned.
Special rules apply for:
- Multiple lenders or owners: The trustee or record owner files on behalf of all.
- Subsequent loan holders: They’re treated as the lender for events after the loan transfer.
- Governmental units: They must report if lending money secured by property.
Exemptions include property outside the U.S. if the borrower provides an exempt foreign person statement (unless known to be false), and certain personal-use tangible property not held for investment or business.
When and How to File Form 1099-A?
Form 1099-A must be filed in the year following the calendar year of the acquisition or abandonment. For tax year 2025 (filings in 2026), the due date for furnishing copies to borrowers is February 2, 2026 (since January 31 falls on a weekend), and for filing with the IRS, it’s February 28, 2026, for paper filings or March 31, 2026, for electronic filings.
How to file:
- Electronic filing: Required if filing 10 or more information returns (reduced from 250 in prior years).
- Paper filing: Use Form 1096 as a transmittal.
- Provide a copy to the borrower by the due date.
- Coordinate with Form 1099-C: If debt cancellation of $600 or more occurs in the same year, file only Form 1099-C and include the relevant 1099-A details on it.
Penalties for non-compliance include fines for late filing or failure to furnish statements, as outlined in the General Instructions for Certain Information Returns.
Key Boxes and Information on Form 1099-A
The form includes several boxes that capture critical details:
- Box 1: Date of Lender’s Acquisition or Knowledge of Abandonment – The date the lender acquired the property or learned of abandonment.
- Box 2: Balance of Principal Outstanding – Unpaid principal only (exclude interest or costs).
- Box 4: Fair Market Value of Property – FMV at the time of acquisition or abandonment; for sales, it’s often the proceeds.
- Box 5: Was Borrower Personally Liable for Repayment of the Debt? – Checked if the borrower was liable.
- Box 6: Description of Property – A brief description, such as the address or type of asset.
The borrower’s TIN can be truncated on the recipient’s copy for privacy, but the full TIN is required on the IRS filing. An account number is mandatory if there are multiple accounts for the same borrower.
Tax Implications for Borrowers Receiving Form 1099-A
If you receive Form 1099-A, it doesn’t mean you automatically owe taxes—it signals a potential taxable event. Treat the transaction as a sale of the property:
- Sale price: Generally, the FMV or the outstanding debt, whichever applies.
- Calculate gain or loss: Subtract your basis (original cost plus improvements) from the sale price.
- If the debt exceeds FMV and you’re personally liable, the difference may be canceled debt income (report on Form 1099-C if applicable).
For principal residences, exclusions like the mortgage debt relief (which expires December 31, 2025) may apply if qualified. Consult a tax advisor to determine if you qualify for exclusions under IRC Section 108.
Differences Between Form 1099-A and Form 1099-C
Form 1099-A focuses on property acquisition or abandonment, while Form 1099-C reports canceled debt of $600 or more. If both events occur in the same year, lenders often combine reporting on Form 1099-C. Key difference: 1099-A is about the property transfer, whereas 1099-C is about debt forgiveness.
Recent Updates for Tax Year 2025
For 2025 (filings in 2026), Form 1099-A uses a continuous-use revision, meaning no major form changes from prior years. However, the mortgage and student loan forgiveness relief under Section 108(f)(5) expires December 31, 2025, potentially increasing taxable canceled debt for affected borrowers. General 1099 filing thresholds and electronic requirements have updates, but they don’t directly alter 1099-A specifics. Always check IRS.gov for the latest guidance.
Frequently Asked Questions About IRS Form 1099-A
What should I do if I receive Form 1099-A?
Report the transaction on your tax return as a property sale. Use the details to compute gains/losses.
Is abandoned property always reportable?
Yes, if the lender has reason to know of the abandonment, typically based on facts indicating permanent discard.
Can I file Form 1099-A electronically?
Yes, and it’s required for 10+ returns starting in 2025.
What if the property is outside the U.S.?
Generally exempt if the borrower is a foreign person and provides certification.
For more details, download the Info Copy PDF from the IRS: https://www.irs.gov/pub/irs-pdf/f1099a.pdf.
This guide provides a comprehensive overview of IRS Form 1099-A to help with your tax planning. For personalized advice, consult a qualified tax professional.