[ad_1]
Form 1099-A is used to report a foreclosure on a federal income tax return in the US. It establishes fair market value, sales price, and date of sale for the home. The form includes the lender and borrower’s information, the date of repossession, and the fair market value of the property. Taxpayers can use the difference between the fair market value and remaining loan balance to report a gain or loss on their tax return.
Form 1099-A is one of the forms used to report income to the United States Internal Revenue Service (IRS). Form 1099-A is typically used to help taxpayers accurately report a foreclosure on that year’s federal income tax return. This form is typically issued when a homeowner fails to make timely payments on a mortgage loan and the lender repossesses the property. For tax purposes, the IRS considers the loss of a home to foreclosure to be equivalent to the sale of the home itself. Form 1099-A generally helps establish a fair market value, sales price, and date of sale for the home so that the taxpayer can report a gain or loss when reporting the foreclosure on the home to the IRS.
The United States IRS Form 1099-A is just one of several 1099 forms used to help report non-employee forms of income to the Internal Revenue Service. In general, taxpayers are expected to include copies of any 1099 forms when filing their federal income tax return for that year. Form 1099-A is typically filed when a lender repossesses secured property, or property that has been offered as collateral for a loan. This form is not always filed when insured property is abandoned, but is generally reserved for real property repossession. Nonpayment of personal property loans, such as auto loans, often does not result in the issuance of a 1099-A.
The typical 1099-A form contains several important pieces of information. The lender’s contact information is usually listed, as is the borrower’s. Taxpayer identification numbers and any relevant account numbers are also typically listed on the form.
Additional information that typically appears on the 1099-A form includes the date the lender repossessed the property and the amount of money still owed to you at the time of repossession. The fair market value of the property is generally included. A brief description of the property may be included, and the lender will usually indicate whether the listed borrower was personally responsible for repaying the secured loan.
Taxpayers can generally use the difference between the reported fair market value of the foreclosed property and the remaining loan balance to report a gain or loss on that year’s federal tax return. Home foreclosures are typically reported as property sales, with the foreclosure date as the sale date and the remaining loan balance as the sale price. Copies of the form are normally issued to both the taxpayer and the IRS.
Smart Asset.
[ad_2]