Form 1099-A: Acquisition or Abandonment of Secured Property – 2025 Guide
When you face foreclosure, repossession, or walk away from property that secured a loan (like a house or car), both you and your lender have important tax reporting obligations. Form 1099-A is the IRS document that makes sure everyone reports these transactions correctly. This guide breaks down everything you need to know in plain English.
What Form 1099-A Is For
Form 1099-A is an information return that lenders send to borrowers and the IRS when a lender takes back property that secured a debt—or when the lender knows the borrower has abandoned that property. Think of it as the official notice that says, "The lender got the property back" or "The borrower walked away from this property."
Who receives it
If you're the borrower, your lender will mail you a copy (usually by early February). The lender also sends a copy to the IRS. You'll use the information on this form to determine if you had a taxable gain or loss when you lost the property.
Who files it
Lenders must file Form 1099-A if they lend money as part of their business and either acquire an interest in secured property (through foreclosure, repossession, or voluntary transfer) or have reason to know the property was abandoned. You don't need to be "in the lending business" to have this obligation—even if you made a one-time secured loan in connection with your trade or business, you may need to file.
What property counts
The form applies to real property (homes, land), intangible property, and certain tangible personal property. However, there are exceptions—personal-use items like your car typically don't require reporting unless they're held for investment or business purposes.
IRS.gov/forms-pubs/about-form-1099-a
When You’d Use Form 1099-A (Filing Deadlines, Late, and Amended Returns)
Standard filing deadline for lenders
Lenders must file Form 1099-A with the IRS by March 2, 2026 (for 2025 tax year transactions) if filing on paper, or March 31, 2026 if filing electronically. The lender must also provide a copy to you (the borrower) by February 2, 2026.
When to file
File the form in the year following the calendar year when the lender acquired the property or first knew (or had reason to know) about the abandonment. For example, if your home was foreclosed on in July 2025, your lender files the 1099-A by early 2026 for the 2025 tax year.
Late filing
If you're a lender who missed the deadline, file as soon as possible. The IRS imposes penalties for late filing that increase the longer you delay. Penalties start at $60 per form (for forms filed within 30 days of the deadline) and can reach $330 per form if filed after August 1st or not filed at all.
Amended returns
If you discover an error on a Form 1099-A after filing, you must file a corrected form. Mark the "CORRECTED" box at the top of the new form, fill in all the correct information, and send it to the IRS using the same filing method as the original. You must also provide a corrected copy to the borrower. Don't file a second form with just the corrections—provide all information, both corrected and unchanged.
Extension requests
Lenders can request an automatic 30-day extension using Form 8809, which must be filed by the original due date. Under certain hardship conditions, an additional 30-day extension may be available.
Key Rules or Details for 2025
Several important rules govern Form 1099-A reporting for 2025:
Coordination with Form 1099-C
If both the property acquisition/abandonment and debt cancellation happen in the same calendar year, the lender may file only Form 1099-C (Cancellation of Debt) instead of both forms. The lender completes boxes 4, 5, and 7 on Form 1099-C to satisfy the 1099-A requirement. This simplifies paperwork when foreclosure and debt forgiveness occur simultaneously.
Property outside the United States
No reporting is required if the secured property is located outside the U.S. and the borrower provides a statement (under penalties of perjury) certifying they're an exempt foreign person—unless the lender knows this statement is false.
Personal property exception
Tangible personal property (like vehicles) securing loans to individuals for personal use doesn't require Form 1099-A reporting. However, if that same property is held for investment or used in business, reporting is mandatory.
Multiple lenders
When several lenders have security interests in the same property and one forecloses (affecting the others' interests), all affected lenders must file Form 1099-A for their respective loans—even if they received nothing from the foreclosure.
Abandonment determination
Property is considered abandoned when objective facts show the borrower intended to permanently discard it. Lenders must file when they know or have reason to know about abandonment based on all circumstances. If foreclosure action is expected within 3 months of suspected abandonment, reporting occurs when the lender acquires the property. If foreclosure doesn't proceed, reporting is required at the end of the 3-month period.
Mortgage and student loan relief expires
Important for borrowers—the exclusion from income for discharged qualified principal residence mortgage debt and certain student loan debt under Section 108 expires on December 31, 2025. After that date, these debt cancellations may become taxable.
Step-by-Step (High Level)
For Lenders
Step 1: Determine if you must file
You must file if you lent money in connection with your trade or business and either acquired an interest in secured property or know the property was abandoned. Review the property type exceptions first.
Step 2: Gather required information
You'll need the borrower's name, address, and taxpayer identification number (TIN); the date you acquired the property or learned of abandonment; the principal balance outstanding (excluding interest and fees); the fair market value of the property; whether the borrower was personally liable; and a property description.
Step 3: Complete the form accurately
Use the red-ink Copy A for IRS filing. Report only the unpaid principal in Box 2—don't include accrued interest or foreclosure costs. For fair market value (Box 4), foreclosure sale proceeds are generally considered the FMV; for abandonments or voluntary transfers, use the appraised value if the borrower was personally liable.
Step 4: File with the IRS and provide copies to borrowers
File by the appropriate deadline (paper or electronic). Furnish Copy B to the borrower by February 2, 2026. Keep Copy C for your records.
For Borrowers (Recipients)
Step 1: Review the form carefully when received
Check that all information is accurate—especially the fair market value, principal balance, and whether Box 5 indicates you were personally liable for the debt.
Step 2: Calculate your gain or loss
The amount realized depends on whether the debt was recourse (you're personally liable) or nonrecourse (you're not liable). For recourse debt, your amount realized equals the property's FMV. For nonrecourse debt, it's the entire debt amount regardless of property value.
Step 3: Report on your tax return
Use Schedule D (Form 1040) and Form 8949 for property not used in business, or Form 4797 for business property. You may have both a gain/loss from the property disposition and cancellation of debt income to report.
Step 4: Consider exclusions and exceptions
Certain situations allow you to exclude debt cancellation from income—such as bankruptcy, insolvency, qualified principal residence debt (through 2025), or qualified farm debt. See Publication 4681 and Form 982 for details.
Common Mistakes and How to Avoid Them
Mistake #1: Including interest and fees in the principal balance (Box 2)
Box 2 should show only the unpaid principal debt when the property was acquired or abandoned. Don't add accrued interest, late fees, or foreclosure costs. Keep separate accounting records to identify the pure principal amount.
Mistake #2: Using the wrong date in Box 1
For acquisitions, enter the date title or possession transferred—not the default date or the date you started foreclosure. For abandonments, use the date you knew or should have known about the abandonment. Review your documentation carefully and use the legally effective transfer date.
Mistake #3: Failing to determine and report personal liability correctly (Box 5)
Whether the borrower was personally liable affects how they calculate their tax consequences. Check the original loan documents and any modifications. If the debt was nonrecourse (property-only security), leave Box 5 unchecked. If the borrower signed personally for the debt, check the box.
Mistake #4: Providing vague property descriptions (Box 6)
"House" or "Property" won't cut it. For real property, include the complete street address or, if necessary, the section, lot, and block. For personal property, specify the type, year, make, and model (e.g., "2023 Ford F-150"). Use "CCC" only for crops forfeited on Commodity Credit Corporation loans.
Mistake #5: Reporting tangible personal property held for personal use
Not all repossessions require Form 1099-A. If you repossessed a car or boat that the borrower used personally (not for business or investment), no form is required. Document the property's use to support your decision not to file.
Mistake #6: Filing Form 1099-A when Form 1099-C would suffice
If you acquire property and cancel $600+ of debt in the same calendar year, you can file just Form 1099-C and complete boxes 4, 5, and 7. Filing both forms creates confusion and extra work—choose the streamlined approach when applicable.
Mistake #7: Missing the TIN or using an incorrect one
Always request the borrower's taxpayer identification number when the loan originates using Form W-9. If you don't have a TIN or suspect it's wrong, use the IRS TIN Matching program before filing to avoid penalties and backup withholding issues.
What Happens After You File
For lenders
Once you've filed Form 1099-A with the IRS and provided copies to borrowers, keep Copy C and all supporting documentation for at least 4 years. The IRS may match the form against the borrower's tax return to verify proper reporting. If you discover an error later, file a corrected form immediately.
You may receive IRS notices if there are TIN mismatches (CP2100/CP2100A notices). Respond promptly by verifying information and filing corrections if needed. Implement TIN validation before filing next year to prevent recurring issues.
For borrowers
The information from Form 1099-A determines your tax liability for the year of foreclosure or abandonment. You must report the disposition of the property and calculate gain or loss on your tax return, even if you didn't receive any cash.
Potential additional tax liability
Depending on whether the debt was recourse or nonrecourse, you may owe tax on:
- Gain from the sale/disposition: If the property's FMV (or debt amount for nonrecourse loans) exceeds your adjusted basis, you have taxable gain.
- Cancellation of debt income: If your lender also forgives debt, you may receive Form 1099-C and owe tax on that cancelled amount (unless you qualify for an exclusion).
Processing timeline
The IRS processes information returns throughout the spring and summer. They use automated systems to match the forms against taxpayer returns. If you're a borrower who doesn't report the transaction properly, expect a notice (typically a CP2000) within 12-18 months after filing your return. This notice proposes additional tax based on the unreported information.
Audit considerations
Foreclosures and abandonments sometimes trigger closer IRS scrutiny, especially if the amounts are large or there are indications of possible exclusions. Keep thorough records documenting the property's adjusted basis, any improvements, dates of acquisition/abandonment, and communications with your lender.
FAQs
Q1: I received a 1099-A but the information is wrong. What should I do?
Contact your lender immediately to request a corrected form. Lenders must issue corrected Forms 1099-A when errors are discovered. If your lender won't cooperate or can't be reached, report the correct information on your tax return and attach a statement explaining the discrepancy and showing your calculations. Keep documentation proving the correct amounts in case of IRS inquiry.
Q2: Do I owe taxes if my home was foreclosed?
It depends. You might have two separate tax issues: (1) gain or loss on the disposition of the property, and (2) cancellation of debt income. For the property disposition, if the debt was nonrecourse, you won't have cancellation of debt income but your gain/loss calculation uses the full debt amount. For recourse debt, use the property's FMV. Through 2025, you may be able to exclude up to $2 million ($1 million if married filing separately) of cancelled qualified principal residence debt. After 2025, this exclusion expires unless extended by Congress.
Q3: What's the difference between Form 1099-A and Form 1099-C?
Form 1099-A reports the acquisition or abandonment of secured property; Form 1099-C reports cancellation of debt. You might receive both forms (filed in different years), just one, or Form 1099-C alone (if both events occurred in the same year). Form 1099-A helps you calculate gain/loss on the property disposition; Form 1099-C reports potentially taxable debt forgiveness income.
Q4: I abandoned my rental property in 2025 but haven't heard from my lender. Do I still need to report anything?
Yes. Even if you haven't received Form 1099-A, you must report the abandonment on your 2025 tax return. Treat it as a sale or exchange of the property on the date of abandonment. If you haven't received the form by mid-February 2026, contact your lender. If you still don't get it by February 15, call the IRS at 1-800-829-1040. You can still file your return using the best available information—just be prepared to explain your calculations.
Q5: Does Form 1099-A apply to car repossessions?
Only sometimes. If you financed a car for personal use, no Form 1099-A is required when it's repossessed. However, if the vehicle was used in your business or held for investment, Form 1099-A reporting applies. As the borrower, if you used the car partly for business, you must still report the repossession and calculate gain/loss based on your business-use percentage and adjusted basis.
Q6: My lender foreclosed on my second home/vacation property. Are the same rules different from my main residence?
The property disposition rules are the same—you calculate gain or loss using the information from Form 1099-A. However, if any debt is cancelled, the tax treatment differs significantly. The qualified principal residence debt exclusion only applies to your main home—not second homes, vacation properties, or rental properties. Cancelled debt on these properties is generally taxable unless you qualify for other exclusions (like insolvency or bankruptcy).
Q7: I received Form 1099-A in early 2026 for a 2025 foreclosure. My 2025 tax return is already prepared. Do I need to file an extension?
No extension is needed—Form 1099-A should arrive well before the April filing deadline. However, you must report the information on your 2025 return, even if you just received the form. Don't file your return without including this transaction. The timing is by design: lenders must provide borrower copies by early February specifically so you can include the information on that year's return. If you already filed without reporting it, you'll need to file an amended return (Form 1040-X).
Additional Resources
- IRS Form 1099-A and Instructions: IRS.gov/forms-pubs/about-form-1099-a
- IRS Publication 4681 (Canceled Debts, Foreclosures, Repossessions, and Abandonments): IRS.gov/pub/irs-pdf/p4681.pdf
- Topic No. 432 (Form 1099-A): IRS.gov/taxtopics/tc432
- Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness): IRS.gov/forms-pubs/about-form-982
This guide provides general information based on 2025 tax rules. For specific tax advice regarding your situation, consult a qualified tax professional or contact the IRS at 1-800-829-1040.
