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What do I need for my taxes after losing my home?

Gather four kinds of papers: the tax forms your lender sends, the papers from the sale or foreclosure, records of what you paid for and put into the home, and proof for any exception you may claim. Then answer a few key questions and get help. Use this checklist so nothing gets missed.

By Guillermo Serafin, broker and owner of Serve First Realty. Updated October 2026.

Which tax forms should I look for?

  • Form 1099-A, if the lender took the home in a foreclosure or learned you abandoned it.
  • Form 1099-C, if the lender canceled 600 dollars or more of debt. You may get one from each lender, including a second loan.
  • Form 1098, the mortgage interest statement, if your lender sent one for the year.
  • Form 593, if California tax was withheld from a short sale, or if you claimed an exemption.

For events in 2025, Forms 1099-A and 1099-C were due to you by February 2, 2026. If one is missing, call the lender. Learn to read them in Got a 1099-C or 1099-A in the mail?

Which sale and loan papers do I need?

  • The closing statement from escrow, if you had a short sale or regular sale.
  • The lender's written short sale approval or deed in lieu agreement, showing whether the rest of the debt was forgiven.
  • Foreclosure sale notices and the sale date.
  • Your last loan statements, showing the principal balance and any past-due interest.
  • Any loan modification agreements, especially one that lowered your principal.
  • Any written agreement to forgive debt made before January 1, 2026. It may matter for the old federal exclusion.

Which records show my basis?

Your basis is usually what you paid for the home, adjusted over time. You need it to figure your gain or loss. IRS Publication 551 explains basis in more detail.

  • Your purchase closing statement.
  • Receipts for improvements you made to the home, such as adding a garage.
  • Records of any past casualty loss you deducted, since it can lower your basis.
  • Records of any earlier forgiven debt you left out of income while keeping the home, since that may have lowered your basis.

Which papers support an exception?

  • Insolvency: statements for every debt and asset as of right before the debt was canceled, including retirement accounts. See our insolvency worksheet walkthrough.
  • Bankruptcy: your case number and discharge papers.
  • Nonrecourse loan: your note and deed of trust, and box 5 on your 1099 forms. See recourse vs. nonrecourse loans.
  • Main home sale exclusion: records showing the years you owned the home and lived there as your main home.

What questions will my tax preparer ask?

  • Was this your main home? Did you ever rent it out or use it for a business?
  • Were you personally liable for the loan?
  • On what date did the foreclosure, sale, or debt cancellation happen?
  • Did any of the loan pay for things other than buying, building, or improving the home, such as credit cards or a car?
  • Have you filed bankruptcy?

What forms might go on my return?

  • Form 8949 and Schedule D to report the sale of the home, if required.
  • Schedule 1 (Form 1040), line 8c, for taxable canceled personal debt.
  • Form 982, to claim an exclusion such as insolvency or bankruptcy.
  • On your California return, Schedule CA (540), line 8c, column C, if you left out forgiven mortgage debt on your federal return. See California vs. the IRS.
  • Your California return, to claim any real estate withholding as a credit. See the short sale withholding surprise.

Where can I get help?

  • A tax professional, such as a CPA or enrolled agent.
  • The IRS Volunteer Income Tax Assistance program, VITA, at 800-906-9887. The IRS screening sheet says volunteers can help with some home foreclosures, but cases like a home once used as a rental or business, or some canceled debt cases, are sent to a professional.
  • If you lost a rental, see rental property foreclosure taxes.
  • The Taxpayer Advocate Service at 877-777-4778, if you cannot fix a problem with the IRS on your own.

General information, not tax or legal advice. We are not tax professionals. Sources: IRS Publication 4681 (2025), IRS Publication 551, IRS Publication 936, IRS Publication 523 (2025), IRS Publication 4731-A (Rev. 10-2024), IRS Forms 1099-A and 1099-C (Rev. 4-2025), FTB 2025 Instructions for Schedule CA (540), and FTB Publication 1016 (Rev. 02-2026).

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