Form 1099-A is a tax document used by the United States' Internal Revenue Service (IRS). Its official title is the Acquisition or Abandonment of Secured Property form. The United States' tax code requires that businesses use this form to report property that has been obtained as repayment of a debt.

Applicable Situations

When debts are unpaid, the lender may choose to repossess the property in lieu of payment, foreclose upon the property, or obtain property that has been abandoned. In these cases, the lender is obligated to notify the IRS of the property's financial information, including the outstanding balance and the fair market value.

Who files the form?

Lenders who obtain property in lieu of payment through acquisition or abandonment are required to report the transaction on the Form 1099-A. Copies must be send to the IRS and to the borrower.

Electronic filing

Any lender who submits more than 250 of these 1099 forms must file electronically. Electronic submissions must be compatible with the IRS's Filing Information Returns Electronically System (FIRE System). In the past, the IRS accepted tape cartridges, but they no longer accept them.

Deadlines

The 1099-A must be filed with the borrower by February 1 and the IRS by March 1. Electronic filing may be submitted to the IRS by March 31.

Borrower Responsibilities

Borrowers who receive the form 1099-A must report this information on the annual tax form. This information is reported as the cancellation of debt under miscellaneous income.

Source:

IRS: Form 1099-A

Resource:

Turbo Tax: Deductions