Yes, you need to enter the 1099-C data, but no letter is necessary. Assuming that you're the co-signer, go ahead and enter the 1099-C, then make an adjustment to offset the income.
To enter your Form 1099-C in TurboTax, follow the steps below:
- Sign in to TurboTax (if you're not already signed in).
- On the Hi, let's keep working on your taxes! page, select the dropdown to the right of Wages & Income
- Select Pick up where you left off or Work on other income
- Select the dropdown to the right of Less Common Income -- Home sale, canceled debt (1099-C, 1099-A), 1099-SA, gambling, etc.
- Select Start or Revisit to the right of Miscellaneous Income, 1099-A, 1099-C
- On the Let's Work on Any Miscellaneous Income page, select Start to the right of Cancelation of debt (Form 1099-C) or the abandonment and/or acquisition of secured property (Form 1099-A)
- Once you've entered your information, you should be on the Let's Work on Any Miscellaneous Income screen
THEN:
- Scroll down and select the Start or Revisit to the right of Other reportable income
- On the Any Other Taxable Income? screen, select Yes
- On the Other Taxable Income screen enter the description 1099-C Co-Signer, then the amount, as a negative (i.e., -10,000). Select Continue
- On the Other Miscellaneous Income Summary screen, you should see the transaction. Select Done
If the TurboTax Online navigation described above doesn't look like what you're experiencing, see the TurboTax Help article Why does the TurboTax navigation menu look different for me?.
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