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Thank you for your question. I am using your initials because this is a public environment and I wish to protect your identity.
A deed in lieu is often treated as abandoned. So you would get a 1099-A and you could also get a 1099-C.
If there was no forgiveness of debt, then there will not be a 1099-C, but you would get a 1099-A.
Depending on the outcome, you could also have a capital gain on this property.
The Dear Etta,
Actually the 1099-A has been around for a while: http://www.irs.ustreas.gov/pub/irs-prior/f1099a--2006.pdf
None the less: it may be new to you.
In block two the lender will list the remaining balance of the loan when the property was abandoned.
In block 4, they will list the FMV. FMV is either the sale price at auction or open market sale, or the in your case, the deed in lieu, they should list it as the same as the mortgage value.
You are welcome, thanks for you comments and feedback. Best of luck to you.