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Utstark
Joined: 15 Aug 2007
Utstark's page
Posts: 1
105 Magic Points
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Subject: 1099C
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Wed Aug 15, 2007 3:09 pm
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| If I can't afford to pay the settlement offer on a debt, would it be better to request a 1099c from them and pay 20-25 % taxes to the IRS? Also, would the 1099c be filed for the current year or the year of the original debt? |
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Laura
Joined: 21 Jun 2007
Laura's page
Posts: 1400
34707 Magic Points
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Thu Aug 16, 2007 5:31 am
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Actually it depends on what you can afford. If paying the taxes will be easier go for it.
_________________
Regards,
Laura. |
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Morningstar
Joined: 17 Apr 2007
Morningstar's page
Posts: 601
11 Magic Points
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Thu Aug 16, 2007 6:09 am
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The 1099-C is filed for the current year. Your debt is forgiven this year, therefore, it is considered income this year.
Were they offering you a 1099-C? I've not really heard of a creditor just giving up on a debt...it's usually just sold.
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I don't dream since I quit sleeping |
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Laura
Joined: 21 Jun 2007
Laura's page
Posts: 1400
34707 Magic Points
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Thu Aug 16, 2007 6:44 am
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For your second question
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| Also, would the 1099c be filed for the current year or the year of the original debt? |
You will have to file for the year of the original debt.
_________________
Regards,
Laura. |
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Guest
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Thu Aug 16, 2007 1:40 pm
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| Income from the discharge of an indebtedness arises in the calendar year in which an obligation is either satisfied at less than face value, or is forgiven. |
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Laura
Joined: 21 Jun 2007
Laura's page
Posts: 1400
34707 Magic Points
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Fri Aug 17, 2007 10:21 am
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Yes i think I got that part wrong.
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Regards,
Laura. |
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Guest
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Sat Sep 01, 2007 12:23 am
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The IRS actually defines when a debt is deemed as "cancelled" - mainly 1) if settled for less than full balance or 2) if there has been no bona fide collection activity on the account for 3 years (??). You can go to the IRS website, and lookup instructions on 1099C for the actual period.
You really cannot request that a debt be cancelled. As long as the creditor intends to collect on the debt, and as long as they actually do perform collection activities within the IRS time frame, it is not cancelled. |
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cajunbulldog
Joined: 30 Aug 2007
cajunbulldog's page
Posts: 36
Location: Louisiana
-10 Magic Points
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Sat Sep 01, 2007 10:56 am
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Guest is correct,most 1099c are issued when part of a debt is forgiven.If you are issued one you would owe a tax obligation on it unless you can show the Irs that you meet their definition of insolvency.
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Cajunbulldog
Keeping an eye out for consumers. |
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marie cook
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Subject: credit debt
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Thu Sep 27, 2007 3:34 pm
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| I have a 30K credit card debt. Bank settled for $8500. They will send me a 1099C. How much will I have to pay to the IRs. |
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Morningstar
Joined: 17 Apr 2007
Morningstar's page
Posts: 601
11 Magic Points
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Fri Sep 28, 2007 11:01 pm
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It depends on your tax bracket...but as I understand it, you've added 21,500 to your income.
You can try calling the IRS for assistance; look into what constitutes insolvency.
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I don't dream since I quit sleeping |
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KH
Guest
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Subject: what if a 1099C was not received?
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Tue Feb 12, 2008 7:08 pm
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| Must a person list a canceled debt on his/her tax return, if he/she did not receive a 1099C from that canceled debt? |
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Polly
Joined: 06 Jul 2006
Polly's page
Posts: 62
3035 Magic Points
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Markjfvos
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Subject: timing of issuing a 1099C?
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Mon Mar 23, 2009 10:31 pm
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When will a bank issue the 1099C on a foreclosure? Will they wait until
they sell the house? |
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carol
Joined: 27 Jun 2006
carol's page
Posts: 1362
Location: Los Angeles, California
29588 Magic Points
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Tue Mar 24, 2009 6:51 am
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As far as I know, 1099 C form is sent only if the difference between the amount outstanding and the amount for which your property has been sold under foreclosure exceeds $600. However, if you can pay off the difference, then you need not fill up the 1099 C form.
The 1099 C form is send only after the property is sold.
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Keep in touch
Carol |
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Nicko
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Subject: 1099c
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Fri Jan 08, 2010 11:46 am
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| I know my vacant land property was foreclosed upon, only because I searched the records online. The bank has never sent me any notice other than their intent to foreclose way back in Feb 2009...nothing since. I expect to receive a 1099c this year for the charge off but what do I do if I don't receive one? I don't know what the amount will be. |
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