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Title 26 — Internal Revenue CodeRelease 119-73not60

§6050J Returns Relating to Foreclosures and Abandonments of Security

Title 26 › Subtitle Subtitle F— Procedure and Administration › Chapter 61— INFORMATION AND RETURNS › Subchapter A— Returns and Records › Part III— INFORMATION RETURNS › Subpart B— Information Concerning Transactions With Other Persons › § 6050J

Last updated Apr 5, 2026|Official source

Summary

If a person who makes loans as a business ends up taking ownership of the property used as loan collateral to settle a debt, or learns that the collateral has been abandoned, that lender must file a report. Lenders do not have to report loans to an individual that are secured only by tangible personal property that is not held for investment and not used in a business. The report must follow the Secretary’s form and include each borrower’s name and address, a short description of the property and the debt, the debt amount at the time of the acquisition or abandonment, and the amount of debt satisfied when property is taken. "Person" includes government units, and governments must file even if not acting in a business, using a designated official. The lender must give each named borrower a written notice with the filer’s contact name, address, and phone by January 31 of the year after the calendar year of the report. Transfers of the collateral to someone other than the lender can be treated as abandonment under the Secretary’s rules.

Full Legal Text

Title 26, §6050J

Internal Revenue Code — Source: USLM XML via OLRC

(a)Any person who, in connection with a trade or business conducted by such person, lends money secured by property and who—
(1)in full or partial satisfaction of any indebtedness, acquires an interest in any property which is security for such indebtedness, or
(2)has reason to know that the property in which such person has a security interest has been abandoned,
(b)Subsection (a) shall not apply to any loan to an individual secured by an interest in tangible personal property which is not held for investment and which is not used in a trade or business.
(c)The return required under subsection (a) with respect to any acquisition or abandonment of property—
(1)shall be in such form as the Secretary may prescribe,
(2)shall contain—
(A)the name and address of each person who is a borrower with respect to the indebtedness which is secured,
(B)a general description of the nature of such property and such indebtedness,
(C)in the case of a return required under subsection (a)(1)—
(i)the amount of such indebtedness at the time of such acquisition, and
(ii)the amount of indebtedness satisfied in such acquisition,
(D)in the case of a return required under subsection (a)(2), the amount of such indebtedness at the time of such abandonment, and
(E)such other information as the Secretary may prescribe.
(d)For purposes of this section—
(1)The term “person” includes any governmental unit (and any agency or instrumentality thereof).
(2)In the case of a governmental unit or any agency or instrumentality thereof—
(A)subsection (a) shall be applied without regard to the trade or business requirement contained therein, and
(B)any return under this section shall be made by the officer or employee appropriately designated for the purpose of making such return.
(e)Every person required to make a return under subsection (a) shall furnish to each person whose name is required to be set forth in such return a written statement showing the name, address, and phone number of the information contact of the person required to make such return. The written statement required under the preceding sentence shall be furnished to the person on or before January 31 of the year following the calendar year for which the return under subsection (a) was made.
(f)To the extent provided by regulations prescribed by the Secretary, any transfer of the property which secures the indebtedness to a person other than the lender shall be treated as an abandonment of such property.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1996—Subsec. (e). Pub. L. 104–168 substituted “name, address, and phone number of the information contact” for “name and address”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1996 AmendmentAmendment by Pub. L. 104–168 applicable to statements required to be furnished after Dec. 31, 1996 (determined without regard to any extension), see section 1201(b) of Pub. L. 104–168, set out as a note under section 6041 of this title.

Effective Date

Pub. L. 98–369, div. A, title I, § 148(d), July 18, 1984, 98 Stat. 689, provided that: “The

Amendments

made by this section [enacting this section and amending section 6652 and 6678 of this title] shall apply with respect to acquisitions of property and abandonments of property after December 31, 1984.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 6050J

Title 26 — Internal Revenue Code

Last Updated

Apr 5, 2026

Release point: 119-73not60