Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Cancellation of Debt (COD)

Cancellation of Debt—Principal Residence

Form 1099-A

When a personal residence is foreclosed upon, and the lender cancels a portion of the debt, the taxpayer will generally receive Form 1099-A, Acquisition or Abandonment of Secured Property, and Form 1099-C, Cancellation of Debt. If, in the same calendar year, the debt is canceled in connection with a foreclosure of secured property, the lender has the option of issuing Form 1099-C only.

The filing requirements of Form 1099-A are met by the lender completing the following boxes on Form 1099-C:

  • Debt description
  • box 5 (If checked, the debtor was personally liable for the repayment of the debt
  • Fair market value of property

Verify with the taxpayer that the information on Form 1099-A and Form 1099-C is correct. Pay particular attention to the amount of debt forgiven and the fair market value reported. Advise the taxpayer to contact the lender immediately if any of the information is not correct.

Form 1099-C.