Instructions For Forms 1099-A And 1099-C - 2016 (Page 2 of 6) in pdf

Abandonment

similar action within 3 months, as explained earlier. If a

third party purchases the property at a foreclosure,

An abandonment occurs when the objective facts and

execution, or similar sale, the property is treated as

circumstances indicate that the borrower intended to and

abandoned, and you have reason to know of its

has permanently discarded the property from use. You

abandonment on the date of sale.

have “reason to know” of an abandonment based on all

the facts and circumstances concerning the status of the

Box 2. Balance of Principal Outstanding

property. You will be deemed to know all the information

Enter the balance of the debt outstanding at the time the

that would have been discovered through a reasonable

interest in the property was acquired or on the date you

inquiry when, in the ordinary course of business, you

first knew or had reason to know that the property was

become aware or should become aware of circumstances

abandoned. Include only unpaid principal on the original

indicating that the property has been abandoned. If you

debt. Do not include accrued interest or foreclosure costs.

expect to commence a foreclosure, execution, or similar

sale within 3 months of the date you had reason to know

Box 3. Reserved

that the property was abandoned, reporting is required as

of the date you acquire an interest in the property or a

Box 4. Fair Market Value (FMV) of Property

third party purchases the property at such sale. If you

For a foreclosure, execution, or similar sale, enter the

expect to but do not commence such action within 3

FMV of the property. See Temporary Regulations section

months, the reporting requirement arises at the end of the

1.6050J-1T, Q/A-32. Generally, the gross foreclosure bid

3-month period.

price is considered to be the FMV. If an abandonment or

Statements to Borrowers

voluntary conveyance to the lender in lieu of foreclosure

occurred and you placed an “X” in the checkbox in box 5,

If you are required to file Form 1099-A, you must provide a

enter the appraised value of the property. Otherwise,

statement to the borrower. Furnish a copy of Form 1099-A

make no entry in this box.

or an acceptable substitute statement to each borrower.

For more information about the requirement to furnish a

Box 5. Was Borrower Personally Liable for

statement to the borrower, see part M in the 2016 General

Repayment of the Debt

Instructions for Certain Information Returns.

If the borrower was personally liable for repayment of the

Truncating Borrower's identification number on

debt at the time the debt was created or, if modified, at the

statements. Pursuant to Treasury Regulations section

time of the last modification, enter an “X” in the checkbox.

301.6109-4, all filers of Form 1099-A may truncate a

borrower's identification number (social security number

Box 6. Description of Property

(SSN), individual taxpayer identification number (ITIN),

Enter a general description of the property. For real

adoption taxpayer identification number (ATIN), or

property, generally you must enter the address of the

employer identification number (EIN)) on payee

property, or, if the address does not sufficiently identify

statements. Truncation is not allowed on any documents

the property, enter the section, lot, and block.

the filer files with the IRS. A lender's identification number

may not be truncated on any form. See part J in the 2016

For personal property, enter the applicable type, make,

General Instructions for Certain Information Returns.

and model. For example, describe a car as “Car—2012

Honda Accord.” Use a category such as “Office

Account Number

Equipment” to describe more than one piece of personal

The account number is required if you have multiple

property, such as six desks and seven computers. Enter

accounts for a borrower for whom you are filing more than

“CCC” for crops forfeited on Commodity Credit

one Form 1099-A. Additionally, the IRS encourages you

Corporation loans.

to designate an account number for all Forms 1099-A that

Specific Instructions for Form 1099-C

you file. See part L in the 2016 General Instructions for

Certain Information Returns.

The creditor's phone number must be provided in

Box 1. Date of Lender's Acquisition or

the creditor's information box. It should be a

Knowledge of Abandonment

central number for all canceled debts at which a

CAUTION

person may be reached who will insure the debtor is

For an acquisition, enter the date you acquired the

connected with the correct department.

secured property. An interest in the property generally is

acquired on the earlier of the date title is transferred to the

Do not file Form 1099-C when fraudulent debt is

lender or the date possession and the burdens and

canceled due to identity theft. Form 1099-C is to

benefits of ownership are transferred to the lender. If an

be used only for cancellations of debts for which

objection period is provided by law, use the date the

CAUTION

the debtor actually incurred the underlying debt.

objection period expires. If you purchase the property at a

sale held to satisfy the debt, such as at a foreclosure or

File Form 1099-C, Cancellation of Debt, for each

execution sale, use the later of the date of sale or the date

debtor for whom you canceled a debt owed to you of $600

the borrower's right of redemption, if any, expires.

or more if:

1. You are an entity described under Who Must File

For an abandonment, enter the date you knew or had

below, and

reason to know that the property was abandoned unless

you expect to commence a foreclosure, execution, or

-2-

Instructions for Forms 1099-A and 1099-C (2016)

Instructions For Forms 1099-A And 1099-C - 2016 Page 2

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