Client received a 1099-C for debt forgiveness, but there was no mortgage or other collateral involved. Is the bank supposed to issue this if there is no collateral??
-
-
Sure. For example, you could get a 1099-C for credit card debt.
It's probably all taxable too. But the taxpayer effectively got whatever the amount of canceled debt as free income to do with as they please. For example, get a credit card, charge $5,000 worth of goodies, and then have the bank cancel the debt. You got $5,000 of free stuff, only having to pay tax on it is a bargain. -
1099c
Client received a 1099C for $658 showing consumer debt, which in reality was a cell phone bill. Client said the bill was paid in full for the same amount indicated in box 7 for $3458.
So how do you report, if client states and has proof that the bill was paid in full and the 1099C seems to be in error?
SandyComment
-
From the instructions for recipients. So obviously first step should be to contact the creditor. Past that, I don't know.Box 2. Shows the amount of debt canceled. Note: If you do not agree
with this amount, contact your creditor.Comment
Comment