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If you received a Form 1099-A Acquisition or Abandonment of Secured Property, the first thing you must do is determine whether there has actually been a cancellation of debt. The lender should have sent you a Form 1099-C Cancellation of Debt if any debt was canceled. If you have not received a Form 1099-C, you may want to contact your lender to determine if any debt has been canceled.

Foreclosure/Repossession

The foreclosure or repossession of property is treated as a disposition of property from which you may realize gain or loss. Use the Worksheet for Foreclosures and Repossessions on page 13 of IRS Publication 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals), to compute the amount of any gain or loss to claim.

Where you enter your 1099-A information depends on whether the form you received is for your main home, business property, or investment property.

Main Home

If this was a foreclosure of your main home:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income to expand, click Gain or loss on the sale of investments to expand, then click Sale of your main home.
  3. Continue with the interview process to enter all of the appropriate information.
  4. On the screen titled Investment Income - Sale of Main Home, click Yes.
  5. On the second screen titled Investment Income - Sale of Main Home, click Yes.
  6. On the screen titled Sale of Main Home - Date Acquired/Sold, enter the Date sold (shown in Box 1 of Form 1099-A), enter the Date acquired (date you purchased property), enter the Period of nonqualified use (enter total days), then click Continue.
  7. On the screen titled Sale of Main Home - Selling Price, enter the Sales price (from Line 6 of the Worksheet for Foreclosures and Repossessions), then click Continue.
  8. On the screen titled Sale of Main Home - Basis of Home, enter the Purchase price (amount you paid for the home), enter any additions or decreases to the basis, then click Continue.

Note: Any gain computed (that is not excluded due to this being your main home) will be taxable. A loss will not be deductible on your return, since it is personal-use property.

Business Use

To enter the gain or loss for business property, use the Sale of Business Property Worksheet in the appropriate business section (Schedule C, E, or F).

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income (or Rent or Royalty Income, if applicable) to expand, then click Business income or loss from a sole proprietorship, Farming income or loss, or Real estate rental income, whichever applies in your situation.
  3. Click + Add Schedule C, + Add Schedule F, or + Add Schedule E, Pg 1 to create a new copy of the form or Edit to review a form already created, and if those options are not available, the program will proceed with the interview questions for you to enter or review the appropriate information.

Investment Use

To enter the gain or loss for investment related property (on Schedule D):

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income to expand, click Gain or loss on the sale of investments to expand, then click Capital gain or loss (Form 1099-B).
  3. Click + Add Form 1099-B to create a new copy of the form or click Edit to review a form already created.
  4. The program will proceed with the interview questions for you to enter or review the appropriate information.
  5. On the screen titled Investment Sales - Transaction Details, enter the following from your Form 1099-A and your Worksheet for Foreclosures and Repossessions (see previous).

Enter the transaction information:

  • Please enter an appropriate description.
  • The Date acquired will be the date you purchased the property.
  • The Date sold will be the date shown in Box 1 (Form 1099-A).
  • The Cost or other basis will be the amount from Line 7 of the Worksheet for Foreclosures and Repossessions.
  • The Sales proceeds will be the amount from Line 6 of the Worksheet for Foreclosures and Repossessions.

Note. If this is personal property (possibilities are a vacation home, timeshare, vehicle and some inherited property), continue to the screen titled Investment Sales - Adjustment Code(s), then select "L - Other Non-Deductible Loss (including Personal Loss)" from the Other adjustment code drop-down to indicate the property is personal-use property. Any gain computed will be taxable; a loss will not be deductible on your return, since it is personal-use property.

Related Links

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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