{"id":1184,"date":"2018-02-15T18:58:03","date_gmt":"2018-02-15T23:58:03","guid":{"rendered":"https:\/\/www.etax.com\/blog\/?p=1184"},"modified":"2019-07-09T14:25:35","modified_gmt":"2019-07-09T18:25:35","slug":"what-is-a-form-1099-a","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2018\/02\/15\/what-is-a-form-1099-a\/","title":{"rendered":"What is a Form 1099-A?"},"content":{"rendered":"<p class=\"p2\"><span class=\"s2\">A homeowner who has a home in foreclosure can expect to receive a Form 1099-A from the lender. This form reports all the necessary information you\u2019ll need to file your tax return in relation to your home foreclosure. <\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Capital Gains<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">In the eyes of the IRS, a foreclosure is the same as if you sold your property. That means you\u2019ll either take on a capital gain or loss, although there isn\u2019t a stated \u201cselling price\u201d in these circumstances. You\u2019ll require information from your 1099-A at this point.<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Important Information<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">The sale date and price of any foreclosed property is listed on a Form 1099-A. To accurately report the \u201csale\u201d to the IRS, you\u2019ll need to use the fair market value of the property or the balance of the loan that\u2019s still outstanding. Box 2 will state the outstanding loan principal while Box 4 will report the fair market value of the property. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">Box 1 details the date of the foreclosure, which is used as the \u201csale date\u201d of the property, since the property was considered disposed of. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">You should be aware whether or not your loan was considered recourse or non-recourse loan. If Box 5 is checked \u201cyes\u201d, then the loan was likely a recourse loan. The question related to Box 5 is: \u201cWas borrower personally liable for repayment of the debt?\u201d<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Loss or Gain<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">You have to determine if the foreclosure results in a capital gain or loss. You\u2019re not allowed by the IRS to claim capital losses on personal residences, and you need to report gains on a Schedule D. Foreclosures can result in a capital gain, though gains can typically be offset by the capital gain exclusion given to main homes. In many cases, foreclosures don\u2019t acquire any <a href=\"https:\/\/www.etax.com\/blog\/2025\/07\/15\/how-to-pay-0-capital-gains-tax-in-2025-and-make-over-100k-doing-it\/\">capital gains<\/a> tax, however you have to report the information on your 1099-A.<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Reporting Foreclosures<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">If the foreclosed property was a personal residence, you\u2019ll have to file a Schedule D with your taxes. The date of foreclosure in Box 1 is your date of sale, then you\u2019ll need the information in either Box 2 or Box 4 as the selling price. <\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Calculating a Gain<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">A capital gain on a foreclosure is not simply the difference between Box 2 and Box 4. You\u2019ll need to compare the sale price to your cost basis, the actual purchase price of the property, to calculate a gain. The purchase price is found on the closing statements you received when you bought the home. Any difference between the selling price and the purchase price is considered a gain, reported on Schedule D and line 13 on your Form 1040. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A homeowner who has a home in foreclosure can expect to receive a Form 1099-A from the lender. This form reports all the necessary information you\u2019ll need to file your tax return in relation to your home foreclosure. Capital Gains In the eyes of the IRS, a foreclosure is the same as if you sold [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1491,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121],"tags":[577,582],"class_list":["post-1184","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","tag-1099-a","tag-foreclosures"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is a Form 1099-A? - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2018\/02\/15\/what-is-a-form-1099-a\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a Form 1099-A? - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"A homeowner who has a home in foreclosure can expect to receive a Form 1099-A from the lender. 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