Question

I have a question about 1099-A reporting. If my home was foreclosed and I received a Form 1099-A, what do I do?

Answer

Regarding 1099-A reporting, Form 1099-A reports the sale of your home in foreclosure. To figure the gain or loss:

  1. See 1099-A, Box 5 to figure the sales price — also called the amount realized. If the box is marked “Yes,” you have a recourse loan. If it’s marked “No,” you have a nonrecourse loan.
    • If you have a recourse loan, your sales price will be the lesser of these:
      • Outstanding debt immediately before the foreclosure — 1099-A, Box 2
      • Fair market value (FMV) of the foreclosed property — Box 4

Also, include anything else you received from the sale.

  • If you have a nonrecourse loan, your sales price will be the full amount of the outstanding debt immediately before the foreclosure. This applies even if the FMV of the property is less than the outstanding debt.
  1. Subtract your adjusted basis in the property from the sales price.

Report the gain or loss on Schedule D. If there’s a gain, you might be able to exclude it if it’s your main home. If there’s a loss, you can’t deduct it.

 

Related Topics

Related Resources

With my federal return accepted and my state return rejected, can I still expect a direct deposit of my federal refund m

Will your federal refund be deposited if your state return is rejected? Learn more from the tax experts at H&R Block.

Suppose I want use my state tax refund to pay my federal tax debt. Can I file state return now and file my federal retur

Can you file your state and federal tax returns on different dates? Learn more from the tax experts at H&R Block.

What can I do to get a state tax refund instead of paying state taxes every year?

Looking to get a state tax refund this year? Find out how to make changes to state withholdings from the tax experts at H&R Block.

IRS Letter 1962C – Direct Debit Installment Agreement Granted/Revised

Learn more about letter 1962C, why you received it, and how to handle an IRS 1962C letter with help from the tax experts at H&R Block.