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

Top IRS Audit Triggers: Nine Tax Mistakes to Avoid

What triggers the IRS to audit a tax return? Learn how common tax mistakes and errors can be a red flag and affect your chances of being audited by the IRS.

What are the current tax rates?

Find the current percentages for federal income tax rates, capital gains tax rates, Social Security tax rates and more from the tax experts at H&R Block.

The Complete Guide to the W-2 Form

The key to understanding your w-2 form is decoding the boxes and numbers. Learn how to read your w-2 form with this box-by-box infographic from H&R Block.

Form 8863

The tax experts at H&R Block outline how students and parents can file Form 8863 and document qualified expenses. Read about Form 8863 here.