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1099-C Question

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    #1

    1099-C Question

    Taxpayer died 2009. All assets were T.O.D. to spouse. No estate tax return was filed. 1099-C was received by spouse for a credit card debt of $5,000 canceled in 2010. Card and 1099-C were in taxpayer's name only. This is taxable income.

    How should this be handled?
    Tags: None
    #2
    It is taxable income to the deceased spouse only. Spouse will not be filing a tax return for deceased TP in 2010. So the tax issue is moot. The CC company should have filed a claim against the estate for their funds. The executor, personal representative or surviving spouse should have paid the debt. TOD is Transfer on Death, it is not joint ownership. If the funds were in his name, then the estate was liable for the debt.
    Last edited by Burke; 02-12-2011, 05:01 PM.

    Comment

      #3
      Originally posted by Burke View Post
      It is taxable income to the deceased spouse only. Spouse will not be filing a tax return for deceased TP in 2010. So the tax issue is moot. The CC company should have filed a claim against the estate for their funds. The executor, personal representative or surviving spouse should have paid the debt. TOD is Transfer on Death, it is not joint ownership. If the funds were in his name, then the estate was liable for the debt.
      Spouse was contacted by CC company early in 2010. She explained TP was deceased. She was told that the account would be turned over a to different division in the CC company. She never heard any more from the CC company until the 1099C was issued. Never was any attempt made to collect. If there had been she would have paid it.

      Spouse is responsible for the estate. Do I get an EIN for the estate and file a 1041? If so, can the income be passed on to the spouse on a K-1? Or, can I somehow simply report it on her 1040? Thanks for any help.

      Comment

        #4
        Trolling for guidance..

        Comment

          #5
          If she really wants to pay the card off I'm sure they will still let her do that. Surely there is some provision to reverse the 1099 C.

          However, as Burke said she is no longer responsible so if she doesn't want to pay it she can send the form back and say the deceased no longer lives there.
          JG

          Comment

            #6
            Is there

            Any need to file a 1041? Other income that wasn't directly passed to the surviving spouse, a Trust, etc


            Sandy

            Comment

              #7
              Originally posted by S T View Post
              Any need to file a 1041? Other income that wasn't directly passed to the surviving spouse, a Trust, etc


              Sandy
              There is no other reason to file a 1041.

              Comment

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