1099-A

[JanMi]

My understanding on a 1099-A is that nothing is to be reported to the IRS by the taxpayer at this time as it

is only information received by the mortgage holder. When the taxpayer receives a 1099-C then the income

is reported on the required forms.

Please let me know if I am understanding this correctly, as I have a client with a 1099-A and I've read Pub 4681

and nothing there states it's to be reported until a 1099-C is received.

I would appreciate any help with this. Thank you.

[Jack from Ohio]

There is much more involved than Pub 4681. There is a lengthy discussion in this thread...

Your tax preparation software should also lead you in the direction of the correct way to report this for your client.

[jainen]

>>I've read Pub 4681 and nothing there states it's to be reported<<

Page 10 says, "The foreclosure or repossession is treated as a sale from which you may realize gain or loss."

So you report it the same way you would have treated a regular sale. It might be a sale of business or rental property, perhaps releasing suspended losses. Or it could be a home or personal use property, with non-deductible loss or Section 121 exclusion of gain. Whatever.

[Lion EA]

Short answer is you report the sale when client receives 1099-A, and report the COD when client receives 1099-C. They are two separate transactions.