Filed final 1120S in 2013 now he received a 1099... What to do?

[Hamacher]

I have a client that thought everything was finalized in 2013 and a result filed a final S Corporation return. In 2015 my client received a 1099 for $50,000 which he did not receive apparently the money was given directly to a lender to pay off an outstanding debt. Obviously he has to report the additional $50,000 in income but I wondered if he should send in another final 1120S for 2015 or if he should just include it on his personal return. If he sends in another 1120S should he also file a 2014 return with zeros? I'm just trying to avoid a future mess.

[Burke]

What kind of 1099 did he get? 1099-C? And was the SCorp's EIN on it?

[Hamacher]

1099MISC and in S Corp EIN

What kind of 1099 did he get? 1099-C? And was the SCorp's EIN on it?

He received a 1099MISC and it was in the EIN of the S Corporation.

[taxea]

who and on what authority was the 50K sent directly to the lender to pay the debt?
Was the debt deducted as an expense on prior return/s?
How is it that the TP was unaware that this 50K was owed to him?
Something doesn't add up here.

[Burke]

He received a 1099MISC and it was in the EIN of the S Corporation.

You can file a current 1120-S to report the income. What I don't understand is "the money was given directly to the lender to pay off an outstanding debt." What money? Did he actually still owe $50K to this lender when all was said and done?

[Jiggers]

Why wasn't the loan on the S-Corporation's books? Or was this a personal loan?

[Hamacher]

Clarification

The bank took the money for a debt that was owed from another entity that he owned with his father. He sold his business and thought he received all the money he was going to get from the purchaser but ended up getting another $50,000 payment.

I'm guessing I need to file another final return for 2015 but what about 2014? Should we send in a 2014 return with zeros?

[Burke]

This is how I am interpreting this. TP sold his Corp business to a buyer for an agreed-upon sum. Then this buyer paid off a bank loan directly to the bank for another corporation in which the seller was a shareholder? In that case, the TP's Corp that was sold must have been a signatory on that loan, or why would the purchaser pay it for him? In what box is the $50K shown on the 1099MISC? That is not normally how this would be reported. In any event, I would not file a zero return for 2014.