@AlexM1 It sounds like the tax preparer did his/her due diligence anticipating an IRS inquiry later. This is perfectly acceptable. In the meantime, you will need to file the 1099C to report the income since you defaulted on the loan.
In reality, your co-signer was not obligated to report this on their return and if there was an inquiry later on, they would just need to explain that they were the co-signer and that the borrower (you) reported this income on your tax return. While we are here, here is how to report in Turbo Tax.
- Log into Turbo Tax.
- Go to Your tax returns & documents and select 2019.Next choose to amend (change) 2019 return.
- After going through the questions you will go to federal>wages and income
- Less Common Income>show more
- Go to Miscellaneous Income, 1099-A, 1099-C>start
- Then go to Cancellation of debt (Form 1099-C) or the abandonment and/or acquisition of secured property (Form 1099-A).
Edited 01/25/22|05:10 PM PST
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