Form 1099-A can look technical, but the core reporting steps are straightforward once you break them down. This guide walks through the Form 1099-A instructions so lenders, servicers, and other payers can report an acquisition or abandonment of secured property correctly. Use it to confirm when Form 1099-A is required, what data to pull, and how to file on time without last-minute fixes.
Why Is Form 1099-A Important and When Does It Apply?
Form 1099-A lets the IRS know that property securing a loan has been acquired by the lender in full or partial fulfillment of the debt, or that the lender has reason to know the property has been abandoned.
In simple terms, the IRS uses the loan balance, the property’s fair market value, and whether the borrower is personally liable to help determine any gain, loss, or cancellation-of-debt income.
You generally file Form 1099-A when either of these happens:
- The lender acquires the property (this is when you file 1099-A for foreclosure).
This can be through foreclosure, a deed-in-lieu of foreclosure (the borrower voluntarily transfers the title instead of going through foreclosure), or repossession, where the lender takes the property back.
- The borrower abandons the property.
The borrower has permanently left the property without fulfilling payment obligations and with no intent to return—often called “walking away” from the property.
A clean 1099-A file keeps borrower data accurate and shields the recipient from IRS notices.
Form 1099-A Reporting Rules For Lenders: Thresholds And Who Has To File
Form 1099-A filing is driven by the type of transaction, not the size of the remaining balance. Here is how the filing obligation works:
- Who must file: If you lend any amount of money in connection with your trade or business and, in full or partial fulfillment of the debt, acquire an interest in property that secures the debt, or you have reason to know the property has been abandoned, you must file Form 1099-A for each borrower.
- No minimum dollar amount: File even if the remaining principal is just $1.
- Multiple borrowers? Normally, you’ll prepare a separate Form 1099-A for each borrower, but if the property is owned as tenants by the entirety or as community property, you can report both borrowers on one Form 1099-A.
How to File 1099-A: Box-by-Box Instructions (What Goes Where)
Follow these box-specific guidelines to accurately complete each field and avoid common errors when filing Form 1099-A.
| Boxes | Instructions |
|---|---|
| Box 1: Event Date | Use the date you acquired the property (for a foreclosure, the later of the sale date or the end of any redemption period).
For an abandonment, use the date you knew or had reason to know the property was abandoned, applying the 3-month rule if you expect to foreclose soon after. |
| Box 2: Principal Outstanding Balance | Report only the unpaid principal balance of the debt as of the Box 1 date. Do not include overdue fees, penalties, or interest. |
| Box 4: Fair Market Value (FMV) | For a foreclosure or similar sale, enter the property’s FMV in Box 4 (usually the sale price).
For an abandonment or deed-in-lieu, enter the appraised value only if the borrower is personally liable (Box 5 checked); otherwise, leave Box 4 blank. |
| Box 5: Checkbox – “Was the borrower personally liable for repayment of the debt?” | If the loan has recourse (meaning the borrower remains liable), check the box; otherwise, leave it blank. |
| Box 6: Description of Property | Give a clear description of the property.
For real property, list the full address. If the address is not enough to identify it, include the section, lot, and block. For personal property, specify the type, make, and model. For multiple similar items, use a general category such as “Office Equipment.” For crops forfeited under Commodity Credit Corporation loans, enter “CCC.” |
Tip: Make notes so the payer can demonstrate how they selected each amount in the event of an audit.
Detailed Filing Checklist
To maintain compliance with 1099-A regulations, deadlines, and paperwork requirements, adhere to this thorough filing checklist.
- Verify that the event meets the 1099-A requirements (acquisition or abandonment).
- Use Form W-9 to obtain the borrower’s Taxpayer Identification Number (TIN). (Backup withholding, where tax is withheld from certain payments, does not apply because Form 1099-A reports an acquisition or abandonment rather than a payment.)
- Determine the principal balance (amount owed on the loan, not including interest) and FMV (Fair Market Value, the property’s estimated market price) as of the date in Box 1.
- Follow the Form 1099-A filing deadline 2026:
- Copy B to the borrower: February 2, 2026 (the next working day, as January 31, 2026, is a Saturday).
- Copy A to the IRS:
- Paper: File by March 2, 2026 (with Form 1096, a summary return).
- E-file: By March 31, 2026.
- Maintain copies or the ability to recreate the data for a minimum of 3 years (4 years if backup withholding was applied).
Typical Mistakes & How Payers Can Avoid Them
The following issues come up often with Form 1099-A:
- Treating a true cancellation of debt as a Form 1099-A event instead of issuing Form 1099-C, so the discharge is never properly reported.
- Entering the loan payoff or total amount due in Box 2 instead of the outstanding principal balance on the date of acquisition or abandonment.
- Leaving out the fair market value (FMV) when the property is sold on the same day.
- Marking the borrower as personally liable in Box 5 for a nonrecourse loan (which misstates the nature of the debt).
Fix: A simple way to avoid these errors is to confirm the correct form (1099-A vs. 1099-C), tie each box back to your loan records, and run 1099Online’s built-in error scan before you file.
Penalties, Corrections & E-Filing Benefits
Penalties per return (TY 2025 filings):
- $60 if the return is filed within 30 days
- $130 if it is filed after 30 days until August 1
- $340 if it is filed after August 1
- Intentional disregard carries no cap and is at least $680 for each return
Corrections
For Type 1 errors (such as incorrect amounts, codes, or checkboxes), file a new return with the “CORRECTED” box checked.
For Type 2 errors (such as an incorrect TIN/name or wrong form type), you’ll need to first file a zeroed-out corrected return with the “CORRECTED” box checked, then file a separate new original return with the correct information, leaving the “CORRECTED” box unchecked.
Benefits of Using 1099Online to e-File Form 1099-A
- Import loan and property data in bulk from Excel/CSV instead of preparing each form manually.
- Run built-in, no-cost TIN checks to help reduce CP2100/CP2100A “B” notice exposure.
- Submit any required state copies in the same workflow as your IRS e-filing.
- Deliver borrower copies through a secure online portal while keeping all filings and acknowledgments in one archive.
Real-Life Scenarios as Practical Examples
| Occurrence | Correct Form / Boxes | Result for the Payer |
|---|---|---|
| Judicial foreclosure on February 2, 2025; principal $185,000; FMV $200,000; nonrecourse loan | Form 1099-A — Box 1: 02/02/2025; Box 2: 185,000 (principal); Box 4: 200,000 (FMV); Box 5: No | File Form 1099-A only; because the loan is nonrecourse, the foreclosure itself does not trigger a Form 1099-C |
| Warehouse abandoned on July 15, 2025; principal $420,000; FMV $350,000; borrower personally liable | Form 1099-A — Box 1: 07/15/2025; Box 2: 420,000; Box 4: 350,000; Box 5: Yes | File 1099-A for the year of abandonment; if the $70,000 shortfall is later forgiven, file 1099-C for the cancellation year |
| Deed-in-lieu and full debt forgiveness on 09/30/2025 | Form 1099-C only — complete Boxes 4, 5, and 7 on 1099-C instead of filing 1099-A; if you choose to file both, leave Boxes 4, 5, and 7 blank on 1099-C | One 1099-C satisfies both the acquisition and cancellation reporting in the same calendar year |
| Vehicle repossession; principal $22,000; FMV $19,000; car secures an individual’s personal-use loan | No Form 1099-A — personal-use tangible personal property securing an individual’s loan is not reported on 1099-A | No 1099-A required; if the same vehicle secures a business or investment loan, 1099-A applies with Boxes 1, 2, 4, 5, and 6 |
| Two co-borrowers walk away from the same condo | Two Forms 1099-A — each borrower receives a separate 1099-A with the same loan and property details | Satisfies the “file for each borrower” requirement and helps avoid TIN mismatch issues on joint debts |
FAQs
1. Does the payer require an FMV appraisal?
Although a broker pricing opinion or actual foreclosure bid is acceptable, a recent appraisal is preferred; just save the documentation.
2. Does a non-recourse loan require a 1099-A?
Indeed. Just leave Box 5 empty; the regulation applies regardless of who is responsible for the loan.
3. What happens if the borrower redeems the property after the form is submitted?
File a revised Form 1099-A only if the initial return contains inaccurate information under the GIR correction procedures; do not file a corrected Form 1099-A just because of a subsequent redemption.
4. Can a single form cover many parcels under a single loan?
Generally, each acquisition or abandonment is reported on a separate Form 1099-A, but for a single loan secured by more than one piece of property, you may file one Form 1099-A for all acquisitions of that collateral for the year and one Form 1099-A for all abandonments of that collateral for the year, as permitted by the section 6050J regulations.
5. Does Box 2 contain unpaid interest?
No. Box 2 does not include unpaid interest or foreclosure costs. It reports only the unpaid principal balance.
E-file Form 1099-A in minutes using 1099Online to avoid penalties and maintain clear borrower records.