Finance

Manual on How to Fill Out Form 1099-A

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If you are looking for how to fill out Form 1099-A, you might be trying to acquire the property that is the debt security, or if you believe it is abandoned. It is usually filed for borrowers as well as the IRS. Form 1099-A is also known as Acquisition or Abandonment of Secured Property.

What Is Form 1099-A: Acquisition or Abandonment of Secured Property?

If you want to know what is form 1099-A, you might have already received it from the lender or just have an interest in the abandoned secured property. You don’t have to be involved in the lending money business to receive the form. In short, this form is a report of the property foreclosure. After a house is foreclosed, homeowners receive the 1099-A Acquisition or Abandonment of Secured Property form from the lender. This information must be included in the tax return forms.

If you have a foreclosure, the IRS may consider it as canceled debt. The IRS views this form as the act of selling the property. Homeowners have to calculate their loss and gain and provide this information in the tax return.

Who Can File Form 1099-A?

The form is filed by a lender, who is usually related to financial institutions. It is filed with the IRS and a borrower. After the property is sold or was transferred as part of a debt, the lender must fill out Form 1099-A. It has to be submitted during the year when the property was transferred or sold. The lender can file the same form in case this property was abandoned.

The form has 3 copies. They must be sent to:

  • Copy A — to the IRS. You will see that it is made in red ink to stand out from other copies;
  • Copy B is sent to the borrower. The borrower has to keep it and use the information from the form in the tax return documentation;
  • Copy C is kept by the lender.

If the borrower does not receive a copy of the document, they must contact the lender or a bank. You don’t have to attach the form to the tax return but use the information from it. If the lender does not report back, the borrower has to contact the IRS.

How to Fill Out Form 1099-A?

The form is not big enough, and it is not difficult to complete. However, it requires the knowledge of exact numbers. You have to check the form twice to ensure that all the calculations are correct, as well as contacts inside. Here are the 1099-A instructions to follow:

  1. Provide the lender’s name, address, and phone number in the first box.
  2. Include TINs of the lender and the borrower.
  3. Write down the name of the borrower and the address, including street, city, and ZIP code.
  4. Following the instructions in the form, find the account number and write it down.
  5. Write down the calendar year.
  6. Section 1 is for the date of acquisition or first notice of abandonment.
  7. Section 2 is for the major outstanding balance.
  8. Leave section 3 blank.
  9. Section 4 is for the value of the property on the market.
  10. Put the tick in section 5 if the borrower could repay the debt.
  11. Describe the property in section 6.

Section with the account number must contain the data of the lender so that the IRS could distinguish the account. As for box 3, it is made for future use. The form does not require any signatures.

How to File Form 1099-A?

Here is how to report 1099-A:

  1. Complete the form till the due date, which is January 31, when it must be already sent to the IRS and the borrower.
  2. Send copy A to the IRS and copy B to the borrower. You can send the documents via email. The IRS accepts forms online via the app or website.
  3. Once the form is received from the lender, the borrower has to include the information in form 1040’s Schedule D. This schedule includes data on the losses or gains. Form 1040 has to be sent from the taxpayer to the IRS.

Form 1099-A requires your total attention to each section. Send it to the IRS before the due date, and wait for the answer. Have you ever sent or received this document before? Share your experience in the comments below.

Article by pdfliner.com


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Frank is a senior editor and productivity enthusiast. Loves hunting and reviewing new tools. When he's not writing he's normally cooking, gardening or reading.

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