T/P had $40K in student loans. In 2012, she incurred a serious medical problem, now a legal matter, and in 2013 she was determined to be permanently disabled, and the US Dept of Education issued her a 1099C, cancelling the $40k in loans. On the 1099C form, box 6 (identifiable event) it is marked F (by agreement). Entering this information on the tax program, it indicates that the Tax on the $40K is also excused. I am not so sure. Any Thoughts...Thanks,
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I had a similar 1099-C, student loan cancel, code F. everything that I read, says it was taxable, my client didn't pay tax on it because
he was insolvent at the time.
What software are you using? what screen do you input the 1099-C? -
Code probably means nothing.
I too have a client like mrbill that has a code F and is disabled but upon looking at another 1099-C I did in mid Feb, it too had a code F and it was not a student loan nor was the taxpayer disabled. I asked my client if they think they were insolvent the day before the cancellation date and TP did not believe so but TP said spouse, for which 1099-C is issued, may have been insolvent. What came to mind is married filing separately but does one split the the assets and liabilities in half when creating calculating net worth or can it even be done?Comment
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