Received Form 1099-A for our Timeshare cancellation but not a 1099-C

[Suzanne17]

We have been in the process of getting out of our timeshare.  In April 2021, the timeshare company notified us that they were "accepting back our Membership in satisfaction of the balance, and the obligations due from us to them will be deemed discharged as a result....Thereafter, we will not have any Membership rights and will not have any further obligation to make payments under the Agreement."  We recently received a Form 1099-A regarding the "Acquistion or Abandonment of Secured Property" which states that the FMV exceeds the Balance of Principal Outstanding and has the box checked for "the borrower was personally liable for repayment of the debt."  We have not received a Form 1099-C or anything else.   What do we need to do for proper filing of our 2021 Tax Return?  What forms need to be filed and how do we properly enter them using Turbo Tax? 

[MinhT1]

Please read this TurboTax Help topic on What do I do with Form 1099-A?

[Rick19744]

Some additional facts would be helpful:

• Are there amounts in box 2 and 4?
• If so, based on your facts, I am assuming box 2 is the lower amount?
• You will need your original purchase statement to determine your original purchase price
• Assume there was a date in box 1?

[Suzanne17]

To answer your questions....

• Are there amounts in box 2 and 4?  Yes
• If so, based on your facts, I am assuming box 2 is the lower amount? Box 2 is lower than 4
• You will need your original purchase statement to determine your original purchase price 
• Assume there was a date in box 1? Yes

[Suzanne17]

I read all of the information in the link but it still doesn't answer my questions.  Where in Turbo Tax do I go to enter my 1099-A information?  When I clicked on the section asking if I had received a 1099-A or 1099-C form, I responded "Yes" but then it only prompted to enter in 1099-C information which I do not have.

[ColeenD3]

You don't enter it. Keep it for your records, you may still get a 1099-C.

You may get Form 1099-A (Acquisition or Abandonment of Secured Property) if your lender foreclosed on your mortgage or repossessed property as a result of a defaulted loan.

If your 1099-A is for personal property, like your personal residence or automobile, you don't need to report it. However, hang on to this form and keep it with your tax records.

On the other hand, if you got a 1099-A for business or investment property (like a rental), we highly recommend that you consult a tax professional for further advice.

[Rick19744]

Some follow-up comments:

• You should receive a 1099-C as well, so I would hold off or make an inquiry
• The 1099-A and 1099-C really relate to two separate components of the transaction
• The 1099-A is related to the sale (abandonment) of your property (timeshare)
• The 1099-C is related to the cancellation of debt
• It is possible to only receive one form, but if that is the case, it should be a 1099-C
• You do, however, possibly have sufficient information if you don't receive a 1099-C.  However, it would be best to inquire about this to make sure what you will report is the same figure.
• Your 1099-A reports the principal outstanding at the date of the abandonment.  This may or may not be the same as what will be reported on the 1099-C.  The amount on the 1099-C may include some unpaid interest; which means it may not agree to the 1099-A amount.
• Using the 1099-A determines whether you have a gain or loss on the "sale" (abandonment).  Your selling price is the lower of box 2 or 4.  This is because you had a recourse loan.
• Now you need to figure out your purchase price for the timeshare.  This is your cost.
• These two amounts will then be reported on form 8949 and Schedule D, along with the appropriate dates.
• The cancellation of debt, will just be reported as other income; whatever that amount ends up being.
• If you don't receive a 1099-C or you are told you won't receive one, then I recommend you use box 2 as the cancellation of debt amount to report as ordinary income.
• So in summary, you have two transactions; one being the "sale" of the property (timeshare), the second being the cancellation of debt.