1099-C College Loan Debt

[Sparky]

Daughter takes out loan. Mother co-signs. Half the debt is cancelled. Who gets the 1099-C? is there a pecking order? Is it split in half?
Thanks.

[DaveinTexas]

Sadly

Daughter takes out loan. Mother co-signs. Half the debt is cancelled. Who gets the 1099-C? is there a pecking order? Is it split in half?
Thanks.

You may find that both receive the 1099C as both were liable. You can't count anything out these days as lenders are reporting these forms to taxpayers in bankruptcy, redundant. And unfortunately, if the mother receives the form there isn't anyway to nominee that income away. If she isn't insolvent/in bankruptcy she can't exclude it from income either.

Never.......ever co-sign a loan.

[S T]

And - don't we find that some 1099-C forms are incorrect, but have a difficult time in having them corrected --- if there is any real possibility.

Other is 1099-C forms are not always issued in the year that we think they should be. Just received one on a Bankruptcy from 2010 - but the 1099-C is issued for 2012.

Sandy

[BP.]

Daughter takes out loan. Mother co-signs. Half the debt is cancelled. Who gets the 1099-C? is there a pecking order? Is it split in half?
Thanks.

Had to look this one up yesterday for a dad & daughter who co signed a car loan and had some debt forgiven when they paid the loan off. Language about multiple debtors here in the 1099- A/C instructions: May be helpful to you.

http://www.irs.gov/pub/irs-pdf/i1099ac_12.pdf