Anglis
Level 3
06-02-2024
01:07 PM
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Good day, Can anyone help with an entry of form 1099A in a partnership return. The client started a business and abandoned in the same year. They bought a truck and unfortunately it was repossessed receiving form 1099A.
FMV showing $15000
Balance of loan $49859, and they originally purchased vehicle for $64,000.
How do I treat this entry on the form 1065.
Thank you,
Angela
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TaxGuyBill
Level 15
06-04-2024
06:23 PM
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A 1099-A is treated as a sale.
If it is recourse debt, the sale price is the FMV.
If it is non-recourse debt, the sale price is balance of the loan.
There could be a 1099-C in the future for cancellation of debt.
