1099-A personal residence foreclosure

[Jesse]

Where does the IRS "look" for the reporting of a 1099-A in it's matching of documents? Just received a 1099-A and am wondering if it's correct in treating this as a "sale" of the home and should it be reported on schedule D?

FMV $97,000
Principal amount forclosed $84,000
Original basis $85,000

If reported on Sched D I would use Sales price of $84,000 basis of $85,000 and a nondeductible personal loss of $1,000.

[Brad Imsdahl]

IRS might look for the transaction on Schedule D. However, it is possible that any gain would qualify for the Section 121 exclusion, in which case it would not be reported anywhere.

I would stick it on the Schedule D to be safe, and simply zero out the gross proceeds so that Schedule D shows no gain or loss, assuming it does qualify for the Section 121 exclusion.

[Jesse]

It does qualify for section 121 and I did enter it as a schedule D transaction thinking that this will avoid any follow up letters from the IRS. Only time will tell. Thanks, I really appreciate this board and everyone's help.