Instructions for Forms 1099-A and 1099-C
Checklist—2015 Tax Year
Forms 1099-A and 1099-C serve distinct but related purposes in reporting debt cancellation and property acquisition events. The Internal Revenue Service requires financial institutions, credit unions, and other applicable entities to file these forms when specific identifiable events occur during the calendar year.
Understanding Reportable Debt Discharge Events
Creditors must file Form 1099-C when they cancel, forgive, or discharge debt of $600 or more during the 2015 calendar year. The debt includes commercial loans, credit card expenditures, and other liabilities for which the creditor released the debtor from a legal obligation.
Partial debt forgiveness counts toward the $600 threshold when the forgiven debt reaches this reporting minimum. Section 6050P of the Internal Revenue Code establishes these reporting requirements for financial entities that cancel debts owed to them.
Identifying the Correct Form for Your Situation
Form 1099-A applies when secured property, such as real estate, vehicles, or equipment, is
abandoned or foreclosed. Form 1099-C applies when debt is canceled or forgiven, whether the debt was secured or unsecured.
The 2015 instructions provide specific coordination guidance for transactions involving both events. When property abandonment and debt cancellation both occur during 2015, you may file only Form 1099-C and satisfy the Form 1099-A requirement by completing boxes 4, 5, and 7 on Form 1099-C.
Completing Forms 1099-A and 1099-C (2015)
Step 1: Complete Property Description Requirements
Box 1 of Form 1099-A requires detailed descriptions that meet 2015 instruction standards. Real property must include the complete street address or, when insufficient for identification purposes, the section, lot, and block designation.
Vehicle descriptions require the vehicle identification number along with year, make, and model information. Generic descriptions such as “real property” or “motor vehicle” fail to satisfy reporting requirements and may result in processing delays.
Step 2: Calculate and Report Debt Discharged Amounts
Box 2 of Form 1099-C reports the amount of canceled debt using the specified calculation method. The 2015 instructions define this amount as the total debt less any amount the lender receives in satisfaction of the debt through settlement agreements, foreclosure sales, short sales, or other payments.
For lending transactions, creditors report only the stated principal amount in Box 2 unless they choose otherwise. Creditors may include interest in the Box 2 amount, but if so, they must separately report that interest in Box 3.
- Code A applies when the debt is discharged through bankruptcy proceedings under Title
- Code B applies when judicial debt relief is obtained through receivership, foreclosure, or
- Code C applies when the statute of limitations expires or when the creditor’s period for
- Code D applies in situations where foreclosure elections legally bar the creditor’s right to
- Code E applies when debt cancellation occurs through probate proceedings or other
- Code F applies when the creditor and debtor enter into an agreement to cancel the debt
- Code G applies when the creditor makes a formal decision or adopts a policy to
- Code H applies when the non-payment testing period expires for certain financial entities
- Code I applies to other actual discharges of debt that occur before another identifiable
Step 3: Enter Identifiable Event Codes in Box 6
Box 6 requires an identifiable event code describing the event that triggered the reporting requirement. The 2015 Form 1099-C provides nine specific codes that creditors must use to classify each triggering event:
11 of the United States Code. other similar court proceedings. filing a deficiency judgment ends. continue collecting the debt. similar legal processes. for less than full consideration. discontinue collection activity on the debt. subject to this reporting rule. event takes place.
These identifiable event codes describe the circumstances that result in a reporting requirement. They do not indicate whether the debtor qualifies for tax exclusions under Section
108 of the Internal Revenue Code.
Step 4: Provide Complete Creditor Information
The creditor information boxes require complete and accurate details for IRS matching procedures. Enter the creditor’s full legal name, street address, city, state, ZIP code, and employer identification number in the designated fields.
Missing or incorrect creditor information may delay IRS processing and prevent proper matching with the debtor’s tax returns. To ensure that debtors can contact the appropriate department, creditors must also provide a telephone number, as emphasized in the 2015 instructions.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 5: Report Property Abandonment Year Accurately
Box 4 of Form 1099-A reports the calendar year when property abandonment or creditor acquisition occurred. Enter “2015” only when the abandonment or foreclosure took place during that specific calendar year.
The 2015 instructions clarify that this date reflects the abandonment year rather than the year the debtor originally purchased the property. Properties abandoned in earlier years should not appear on 2015 Form 1099-A filings.
Filing Deadlines for Paper and Electronic Returns
Creditors must submit Copy A of Form 1099-C to the Internal Revenue Service by February 29,
2016, when filing on paper. Electronic filers have until March 31, 2016, to submit their returns through the Filing Information Returns Electronically (FIRE) system.
Creditors must furnish Copy B to the debtor by the same deadline that applies to paper filings.
Retain Copy C in business records for at least four years from the filing deadline to satisfy recordkeeping requirements.
Year-Specific Changes and Enhanced Guidance
The 2015 instructions expanded guidance on nonrecourse debt treatment and clarified when property acquisition triggers specific reporting requirements. Box 6 identifiable event codes received refinements to provide clearer descriptions of events that trigger reporting obligations.
The $600 reporting threshold remained unchanged from prior years for the 2015 tax year. The instructions added examples showing how to calculate forgiven amounts when partial payments or settlement agreements reduce outstanding balances owed by debtors.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
