Printable Form 2026

IRS Publication 4731-A – IRS Form, Instructions, Pubs 2026

IRS Publication 4731-A – It provides a step-by-step screening process to determine whether a taxpayer’s situation involving Form 1099-A (Acquisition or Abandonment of Secured Property) and/or Form 1099-C (Cancellation of Debt) related to a home mortgage is “in scope” for free volunteer tax preparation assistance or “out of scope” (requiring referral to a professional tax preparer, the IRS website, or the Taxpayer Advocate Service at 1-877-777-4778).

Download the latest PDF here: https://www.irs.gov/pub/irs-pdf/p4731a.pdf.

Purpose and Who It’s For?

This screening sheet helps handle cancellation of debt (COD) income and foreclosure/abandonment issues specifically for a principal residence (the home lived in most of the time; only one at a time). It explicitly directs users to Publication 4731 for nonbusiness credit card debt.

Key gatekeepers:

  • The home was never used for trade/business or rental (otherwise out of scope).
  • Taxpayer not in bankruptcy with discharge of qualified principal residence indebtedness (QPRI) — out of scope.

Volunteers use it to decide whether to prepare the return or refer out due to complexity.

Part I: Only Form 1099-A (Foreclosure or Abandonment of Principal Residence)

  1. Confirm receipt of 1099-A.
  2. Confirm no business/rental use.
  3. Determine recourse (Box 5 checked — personally liable) vs. nonrecourse loan:
    • Recourse: Sales price = lesser of Box 2 (principal outstanding) or Box 4 (FMV) + any sale proceeds.
    • Nonrecourse: Sales price = Box 2 + any proceeds (no personal liability).
  4. Obtain adjusted basis (see Pub 523, Selling Your Home).
  5. Report as sale on Form 8949 (Sales and Other Dispositions of Capital Assets) and Schedule D (Capital Gains and Losses):
    • Gain: May qualify for Section 121 exclusion ($250,000 single / $500,000 married filing jointly if ownership/use tests met).
    • Loss: Nondeductible for personal residence — use adjustment Code L on Form 8949 to exclude.

Complex cases (e.g., business use) → refer out. See also Pub 4012 Foreclosure/Abandonment Key Highlights.

Part II: Form 1099-C (or Both 1099-A/C) — Cancellation of Home Mortgage Debt

  1. Confirm 1099-C accuracy.
  2. No business/rental use.
  3. No interest in Box 3 or bankruptcy code A in Box 6 (or subsequent bankruptcy) → otherwise out of scope.
  4. Determine if debt is qualified principal residence indebtedness (QPRI):
    • Mortgage used to buy, build, or substantially improve the principal residence.
    • Secured by the principal residence.
    • Proceeds not used for credit cards, cars, tuition, vacations, medical, etc.
    • Mortgage amount not more than $750,000 ($375,000 if married filing separately) — this appears as an in-scope screening threshold tied to exclusion limits.
  5. If yes: Exclude via Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness); may also require Form 8949/Schedule D if property disposed. Complete applicable screens/sections.
  6. Otherwise → out of scope (complex rules; taxpayer may still qualify but refer).

Tax Implications: Foreclosure, Abandonment & Mortgage COD

  • Foreclosure/Abandonment → Treated as a sale; gain/loss = amount realized (debt/FMV depending on recourse/nonrecourse) minus adjusted basis (Pub 4681 Chapter 2, Pub 544).
  • Canceled Debt (1099-C Box 2) → Generally ordinary income on Schedule 1 (Form 1040), line 8c (nonbusiness), unless excluded (e.g., bankruptcy, insolvency, QPRI).
  • QPRI Exclusion (under §108(a)(1)(E)): Up to $750,000 ($375,000 MFS) of forgiven qualified mortgage debt on principal residence excludable if discharged before Jan. 1, 2026 (or written agreement before that date). Reduce basis in the home (not below zero) by excluded amount. Expired for discharges/agreements after Dec. 31, 2025.

Important: Always verify current-year rules in Publication 4681 (Canceled Debts, Foreclosures, Repossessions, and Abandonments — 2025 version for 2025 returns) and Pub 523.

Reporting Requirements

  • Lenders issue 1099-A and/or 1099-C (by Jan/Feb following year for prior-year events).
  • Report income/gain/loss timely; attach Form 982 for exclusions.
  • Out-of-scope cases often involve business use, large/complex debts, bankruptcy, or post-2025 discharges — consult a tax professional.
  • Pub 4681 → Detailed rules, worksheets, examples for COD, foreclosures, abandonments.
  • Pub 523 → Selling Your Home (basis, §121 exclusion).
  • Pub 525 → Taxable and Nontaxable Income.
  • Form 982 & instructions.
  • Pub 4012 → VITA/TCE Volunteer Resource Guide (key highlights).

Always download the latest publications from IRS.gov, as tax laws (including exclusions) change. For personalized advice, use the IRS Free File, VITA/TCE (if in scope), or a qualified tax professional. This article is for informational purposes based on official IRS documents as of the publication’s revision and related 2025 guidance.

Keywords: IRS Publication 4731-A, 1099-A foreclosure tax, 1099-C mortgage debt cancellation, qualified principal residence indebtedness exclusion, foreclosure abandonment tax reporting, Form 982, VITA COD screening.