How to File a 1099-A Abandonment

If you lend money to a borrower for a secured debt such as for a car or other personal property, and you have to repossess the property, you must file form 1099-A with the Internal Revenue Service. You must also file this form if you have reason to believe that the borrower has abandoned the property securing the loan. This form is necessary for properly assessing borrower tax liabilities because the borrow may be liable for taxes on the canceled debt.

Instructions

1

Order IRS Form 1099-A through the IRS website or by calling the telephone number listed in the 1099-A instructions.

2

Enter your name, address and telephone number in the first box on the form. Enter your Federal Employer Identification Number in the box marked "Lender's Federal Identification Number," and note the debtor's Social Security Number or FEIN in the box marked "Borrower's Identification Number."

3

List the date you repossessed the collateral or the date you learned that the debtor abandoned the property in box 1. Enter the outstanding loan amount in box 2. This amount only includes principal; it does not include any interest or fees owed by the debtor.

4

List the debtor's name and address in the boxes below your FEIN and the debtor's identification number. If an account number is associated with the loan, enter that number in the "Account Number" box below the borrower's address.

5

Enter the fair market value of the repossessed or abandoned property in box 4. If the amount is less than the outstanding balance and you have canceled the debt, the debtor may be responsible for paying taxes on the difference.

6

Place an "X" in box 5 if the debtor was personally liable for repaying the debt when you initiated or modified the loan. Enter a physical description of the repossessed or abandoned property in box 6.

7

Enter all of the same information on copies B and C of Form 1099-A. Mail copy B to the debtor Jan. 31 of the year after the property was abandoned or repossessed. Mail copy A to the IRS by Feb. 28 and keep copy C for your records.