TaxBandits Knowledge Base

What is Form 1099-A used for?

Lenders use Form 1099-A (Acquisition or Abandonment of Secured Property) to report to the Internal Revenue Service (IRS) and the borrower when a borrower abandons or transfers a secured property to the lender. The form reports the date of the transfer, the amount of the debt owed (principal only), and the fair market value (FMV) of the secured property as of the date of the acquisition or abandonment of the property. 

This form is typically used in situations such as foreclosures, where the lender takes possession of the property, or in situations where the borrower chooses to voluntarily transfer the property to the lender to satisfy the debt.

The borrower uses the information reported on Form 1099-A to determine whether they have a gain or loss on the disposition of the property, which may also impact their tax liability.