I foreclosed on a property and received a 1099A. The FMV is lower than the Principal owed and box 5 is marked no. How do I file this? Is this considered a cancelation of debt? Do I report a gain or loss?

You will probably need to file Form 982 under the Mortgage Forgiveness Debt Relief Act of 2007 for relief from tis debt, but you must wait for the Form 1099-C.

Get professional tax help for this, because you must meet specific criteria to be eligible for tax relief under this procedure.