Table of Contents

1099 Forms

Instructions for Forms 1099-A and 1099-C: Foreclosure, Abandonment & Debt-Cancellation Reporting for Lenders

Updated: September 10, 2026

Key Takeaways

  • Form 1099-A is about the property. It generally applies when a lender takes back secured property or learns that the borrower has abandoned it.
  • Canceled debt is reported on Form 1099-C. An applicable creditor generally files it when $600 or more of debt is canceled.
  • A same-year foreclosure and debt cancellation may be covered by Form 1099-C alone. In that case, the required property details are added to Form 1099-C.
  • When the events happen in different years, the reporting is split. Form 1099-A covers the property event first, and Form 1099-C is filed later for the debt cancellation.

Foreclosure, abandonment, and debt cancellation can create separate IRS reporting requirements for lenders. Form 1099-A reports the acquisition or abandonment of secured property, while Form 1099-C reports qualifying canceled debt. In some cases, the same borrower and debt can involve both forms, depending on what happens to the property and whether any remaining debt is canceled.

This guide covers the instructions for Forms 1099-A and 1099-C.

How Foreclosure and Debt Cancellation Can Create Separate Reporting Events

When the borrower defaults on a secured loan, more than one event may happen. One is foreclosure or abandonment, which concerns what happens to the property securing the loan. The other is debt cancellation, which concerns what happens to the borrower’s unpaid balance.

Since these events may occur at different times, lenders should note that:

  • Foreclosure does not automatically cancel the remaining debt
  • The borrower may abandon property before foreclosure
  • Debt may be canceled after the property event
  • Before filing, check the property event, debt status, and timing to decide whether Form 1099-A, Form 1099-C, or both are needed.

Instructions for Form 1099-A

When must you file Form 1099-A?

A lender generally files Form 1099-A when it lends money in connection with its trade or business and either:

  • Acquires an interest in property, securing the debt in full or partial satisfaction of the debt, or
  • Knows or has reason to know that the borrower has abandoned the secured property.

Note: These rules also apply if lending is not the lender’s primary business.

Determine the acquisition or abandonment date

  • For an acquisition, the date follows IRS ownership-transfer rules. When the lender acquires the property in a foreclosure sale, the acquisition date is generally the later of the sale date or the date the borrower’s right of redemption expires.
  • For abandonment, the date is when the lender knew or had reason to know the property was abandoned. When filing Form 1099-A for abandoned property, use this date to determine the applicable reporting period.

If foreclosure, execution, or a similar sale is expected within 3 months, report based on the acquisition date or third-party purchase date; if the action does not start within 3 months, reporting starts at the end of the 3-month period.

How to complete Form 1099-A

Box What you report
Box 1 Date of acquisition or knowledge of abandonment
Box 2 Unpaid loan principal; exclude accrued interest and foreclosure costs
Box 4 When a lender takes or sells property through a foreclosure-related process, enter the property’s fair market value (FMV). If Box 5 is checked, enter the appraised value for abandonment or a voluntary conveyance to the lender in lieu of foreclosure; otherwise, leave Box 4 blank.
Box 5 Check Box 5 if the borrower was personally liable for repayment
Box 6 Description of the secured property.

Note: For real estate, such as land, a house, or a building, Box 6 generally lists the property address. For personal property, such as a vehicle or equipment, enter a description that identifies the property.

Instructions for Form 1099-C

When must you file Form 1099-C?

File Form 1099-C for each debtor when:

  • You are an entity subject to Form 1099-C reporting rules
  • An IRS-recognized debt-cancellation event occurs
  • You cancel $600 or more of debt owed to you

The filing requirement applies irrespective of the debtor’s tax treatment.

Here, applicable creditors include qualifying financial institutions, credit unions, governmental entities, certain subsidiaries, and organizations with a significant trade or business of lending money.

Note: The $2,000 threshold increase does not apply to these forms. Form 1099-A has no dollar threshold, while Form 1099-C generally has a $600 reporting threshold.

Identify the Form 1099-C cancellation event

Code Identifiable event
A Certain bankruptcy discharges
B Debt becomes unenforceable through receivership, foreclosure, or a similar court proceeding
C Certain statute-of-limitations or deficiency-judgment expirations
D The foreclosure remedy legally bars further collection
E Debt becomes unenforceable through probate or a similar proceeding
F You and the debtor agree to cancel the debt for less than the full amount owed
G Your decision or defined policy ends the collection activity and cancels the debt
H Other actual discharge before another identifiable event

How to complete Form 1099-C

Box What to report
Box 1 Date of the identifiable event
Box 2 Amount of canceled debt, reduced by amounts received through a settlement, foreclosure sale, short sale, or similar satisfaction of the debt
Box 3 Interest included in Box 2, if any
Box 4 Description or origin of the debt
Box 5 Check Box 5 if the debtor was personally liable for the debt
Box 6 Identifiable event code
Box 7 Fair market value (FMV) of the property. For a short sale, include the appraised value; for combined foreclosure reporting, generally use the gross foreclosure bid price; for abandonment or a voluntary conveyance in lieu of foreclosure, use the appraised value.

Note: A debtor’s unpaid balance may include both principal and interest. For lending transactions, Box 2 generally reports the canceled principal only. Interest does not have to be included, but when it is included in Box 2, the interest portion must also be shown in Box 3.

How to Report When Forms 1099-A and 1099-C Apply Together

The difference between 1099-A and 1099-C comes down to timing and lender debt-cancellation reporting requirements:

  • Same Calendar Year: If a property event and debt discharge happen in the same year, you may file Form 1099-C alone to satisfy both reporting requirements. Enter information in Boxes 4, 5, and 7 on Form 1099-C to satisfy both requirements.
  • Dual Filing: If you elect to issue both forms in the same year, report the property acquisition details on Form 1099-A and leave Boxes 4, 5, and 7 of Form 1099-C blank.
  • Different Calendar Years: If the property event occurs in one calendar year and the debt is discharged in a later year, file Form 1099-A for the year of the property event and Form 1099-C for the year of the debt cancellation or identifiable event, as applicable.

Foreclosure, Abandonment, and Debt-Cancellation Scenarios

The following scenarios explain how different property events affect reporting on Forms 1099-A and 1099-C:

Scenario Example Reporting result
Foreclosure without debt cancellation A lender forecloses in 2026 but continues collecting the remaining balance. File Form 1099-A and report the required property and loan information.
Borrower abandons secured property A borrower abandons secured property while the debt remains outstanding. File Form 1099-A when the applicable abandonment timing rule is met.
Foreclosure and cancellation in the same year A lender forecloses in September 2026 and cancels $8,000 in December. Form 1099-C may satisfy both reporting requirements when completed for combined reporting.
Cancellation occurs in a later year Foreclosure occurs in December 2026, and the qualifying debt is canceled in February 2027. Report Form 1099-A for tax year 2026 and report Form 1099-C under the applicable 2027 identifiable-event rules, generally for filing in 2028.
Short sale with debt forgiven A lender accepts a short sale and cancels the qualifying remaining balance. Form 1099-C generally applies if $600 or more is canceled. Code F may apply when the cancellation results from an agreement to settle the debt for less than the full amount owed.

Filing, eFiling, and Borrower/Debtor Statements

For 2026 returns filed during the 2027 filing season, the deadlines are:

Requirement 2027 Deadline
Furnish Form 1099-A to the borrower February 1, 2027
Furnish Form 1099-C to the debtor February 1, 2027
Paper-file with IRS March 1, 2027
eFile with IRS March 31, 2027

Note: For 2026 Forms 1099-A and 1099-C filed in 2027, use IRIS; FIRE is not available after its 2026 year-end shutdown.

Lenders must furnish Form 1099-A to borrowers and Form 1099-C to debtors by the recipient-statement deadline. These recipient copies may generally use truncated TINs, but copies filed with the IRS must include the complete TIN.

Common Reporting Errors Lenders Should Avoid

  • Adding interest or foreclosure-related costs to Form 1099-A, Box 2
  • Reporting the wrong date for the acquisition or abandonment
  • Selecting the wrong Form 1099-C identifiable event code
  • Reporting interest in Box 2 without also reporting it in Box 3
  • Failing to reduce canceled debt by amounts received through a foreclosure sale, short sale, settlement, or similar satisfaction of the debt
  • Treating a foreclosure as automatic proof that the remaining debt was canceled
  • Using FIRE instead of IRIS for the 2027 filing season

FAQs

1. Who files Form 1099-A when several investors own the same loan?

The trustee, record owner, or similar party generally files one Form 1099-A on behalf of the beneficial owners.

2. Is Form 1099-A required for personal-use tangible property?

Generally, no. Tangible personal property securing an individual’s personal-use loan is excluded. Business or investment property may be reportable.

3. How do multiple creditors report canceled debt?

Each applicable creditor generally determines whether its share of the canceled debt meets the $600 reporting threshold.

4. Should a lender file Form 1099-C for identity-theft debt?

No. A Form 1099-C generally should not be filed when fraudulent debt was canceled because the debtor did not actually incur the debt.

5. When is an account number required?

An account number is required when filing more than one Form 1099-A for the same borrower or more than one Form 1099-C for the same debtor.

One loan can create two different 1099 reporting events.

Tax1099 helps lenders file Forms 1099-A and 1099-C accurately, send borrower or debtor copies, and manage corrections without splitting the work across separate filing processes.

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