TP received a 1099-c for education loan in the amount of18k. TP has not been a student 3-4 years and has no income for 2 years. Lives with and supported by friend. I thought there was a way out on some of these loans but can't seem to find. Help please steer me the right way for this. Manny Thanks.
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http://www.irs.gov/publications/p468...link1000192033 - insolvency probably. -
Is that what you're asking about ... a way out of [paying] the loans? If so, the 1099-C form indicates that very thing, i.e. that all or a portion of the loan balance has been canceled. If, instead, you are asking about a way out of reporting the canceled debt as taxable income, then the suggestion (in another reply) about insolvency might help. Even if he's not insolvent, the tax on $18k won't be very much if, as you said, the individual had no income. His standard deduction and personal exemption will reduce the $18k by about $10k, and the remainder will be taxed at just 10% ... so roughly $800 of tax.Originally posted by TAX4USRoland Slugg
"I do what I can."Comment
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Basically what I explained to TP. TP quit school in 2012, no work no assets as she lived with friend. 2014 in a family way still no work and doesn't own a darn thing not even an auto. So I may have a chance at insolvency if not let friend PAY the tax. My rant is done. How do people get in this position?Comment
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Response to your rant....
Responding: N.O.P.Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.Comment
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Not quite sure what N O P is? I think the TP did not like my answer. I think I shall run from this one.Comment
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