My wife died in January of 2020 with $3,500 of credit card debit in her name. Due to good financial planning, her estate was very small. It comprised a piece of land in Florida, which would have to go through probate, and less than $500 in cash. In fact, the total value of the estate was less than the death expenses owed to me. Given priority order of creditors, the credit card company was going to get nothing. However, to simplify the probate in FL, I made an offer to settle the debt for $500 and the credit card company agreed. The credit card company then sent a 1099-C for $3000 in the name of my wife. Since I was still married in 2020, I had planned on filing as married filing jointly. Isn't there some sort of exception for debts owed by my wife's estate such that I won't have to pay taxes on the $3000 as income?
