1099 Received Today

[onthefence]

We did receive a 1099 from Capital One today. I know it isn't a big deal, but I was surprised that we received only 1 since we bk'd 2 accts with them - and the one we received for for the lesser amount! Wonder if we will receive one for the other account with them or any of the others....only time will tell!

Just thought that I would post since I have seen a few threads lately wondering if others had received 1099's.

[Freddy03]

Question what are you suppose to do with the 1099s? Are they added as income??

I'm just curious for my 2011 taxes.

[onthefence]

No, it is not counted as income - you just have to fill out another form (I believe it is form 982) to send along with your taxes.

[tobee43]

Question what are you suppose to do with the 1099s? Are they added as income??

I'm just curious for my 2011 taxes.

freddy...i can't find the darn thread i posted this on...but i had it in another file about the 1099c's....

"Update Dec. 11, 2008 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

2. Is Cancellation of Debt income always taxable?

Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.

Insolvency: If you are insolvent when the debt is canceled, some or all of the canceled debt may not be taxable to you.You are insolvent when your total debts are more than the fair market value of your total assets.Insolvency can be fairly complex to determine and the assistance of a tax professional is recommended if you believe you qualify for this exception.

Certain farm debts:If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your canceled debt is generally not considered taxable income.The rules applicable to farmers are complex and the assistance of a tax professional is recommended if you believe you qualify for this exception.

Non-recourse loans:A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.However, it may result in other tax consequences, as discussed in Question 3 below.

I think there is a form 982 to submit with your taxes to dispute the 1099.

I think a lot of people will fall into one of these categories. Maybe there should be a sticky about this, as it is tax time. A lot of people are probably getting these in the mail right now. "

i know most people receive the 1099c from the cc company's and there is no tax ramifications...hope that helps a bit...

[Freddy03]

Thanks

[tobee43]

Thanks

n/p

[lovemybugs10]

Sorry, wrong place. My question doesn't involve a 7.

[wnguyen]

No, it is not counted as income - you just have to fill out another form (I believe it is form 982) to send along with your taxes.

I got one from Advanta too. Just wonder what line I have to fill out. 1b thru 1e. Which one when I don't have a mortgage?

[wnguyen]

OK, never mind. I found this from the IRS website http://www.irs.gov/pub/irs-pdf/p4681.pdf

How to report the bankruptcy exclusion.

To show that your debt was canceled in a bankruptcy case and is excluded from income, attach Form 982 to your federal income tax return and check the box on line 1a. Lines 1b through 1f do not apply to a cancellation that occurs in a title 11 bankruptcy case. Enter the total amount of debt canceled in your title 11 bankruptcy case on line 2. You must also reduce your tax attribute in Part II of Form 982 as explained under Reduction of Tax Attributes, later.

[tcreegan]

Hi all,

...and don't freak out if you get one next year, or the year after, or the year after that, or....someone posted getting a 1099-C 12 years later!

Companies might hold on to accounts and write them off for tax advantage or to slant the earning report. Sometimes (probably more often than not) it gets lost in the shuffle. Resurfaces when they do an audit. The 1099-C deal depends on corporate accounting, they have to issue one when they take the debt off their earnings reducing the tax they pay. In its infinite wisdom, the IRS decided that if the lending company didn't pay taxes on the $$, they should go get the taxes out of the borrower! Gotta love em....

It is all the same to you though, return the 1099-C w/ your return and another 982. Anything including in the BK is excluded from income even if the 1099-C arrives 12 years later.

Tom in Colo