Form 1099-A. I don't see a box to mark bankruptcy (like there is for Form 1099-C)

[DTNY07]

Client received Form 1099-A.  I don't see a box in the worksheet to mark bankruptcy (as there is one Form 1099-C).  How do I mark that?    This prevents the information from flowing to Form 982.  I've checked this board and while i found a couple of discussions about the bankruptcy, they all mentioned the link on Form 1099-C.  Nothing about Form 1099-A.  Thanks in advance for any help.

[Terry53029]

Usually the lender will file only the 1099C or they will file both A and C. When you fill out the 1099A only you also have to fill out the "Cancelled Debt Worksheet", and link your 1099A to that worksheet. on the worksheet there is a box to check you never received a 1099C.

[TaxGuyBill]

A 1099-A does not mean cancelled debt.

It means you treat it as a 'sale' of the property.

[DTNY07]

I thought that originally.  But, from what I read, when it is a bankruptcy, you don't do it that way.

Maybe I am wrong, but seems that is only proper when it is not a bankruptcy

[DTNY07]

I must be doing something wrong.  Because when I enter no 1099-C it now doubled the amount.

[DTNY07]

I must be doing something wrong. Because when I enter no 1099-C, it doubles the amount 

[Terry53029]

did your client have cancelled debt? if so did you fill out the canceled debt worksheet.

[DTNY07]

I did fill out the cancelled debt worksheet.   What i entered o Form 1099-A flowed to Part 1 Section 5 of the cancelled debt worksheet.  My issue is that unlike when you fill out From 1099-C (which has  part to mark it is from bankruptcy (Box 6 identifiable code), there is no such box to mark on Form 1099-A. Which then makes it taxable and doesn't flow automatically to Form 982 (as it does for Form 1099-C)

There is a Part VI exclusion for bankruptcy on the cancelled debt worksheet.  But, even if i override that on Box 37, the numbers still don't flow properly.

 So do I have to fill out Part III on the cancelled debt worksheet (which would calculate the loss on sale, making the sale zero) and then fill out Form 982 manually?.  Doesn't make sense to me. 

[Terry53029]

I believe you are filling out the worksheet incorrectly, as it seems to work for me with the amounts I made up for the 1099A including filling out the 982 for me. Could you share the actual numbers on the 1099A, and I will see if they work for me.

[DTNY07]

1) 11/3/22 date of abandonment

2) 384,893 principal outstanding

4) 510,000 FMV of property

5) box is checked, borrower was personally liable for repayment of the debt

the basis is not on the 1099-A.  But it is about 420,000

Thanks for your help

[Terry53029]

Is this your clients main home, 2nd home, rental, or what

[DTNY07]

2nd home

[Terry53029 · Accepted solution]

Based on your numbers, your client does not have canceled debt (mortgage 384893 FMV 510000) You just fill out the worksheet, and no 982 required. It is as if your client sold his home to the bank for a loss. When the bank does sell the property if less than 384893 then he will receive a 1099c. When you get to part 3 of the worksheet consider it a short sale. It works if you fill out the entire worksheet correctly

[DTNY07]

It worked.   Thank you so much