Can you state the authority for the proposition that the estate has no filing requirement for the forgiveness of debt because the 1099-C was issued under the descendant's name/SSN? Why isn't this just IRD (income in respect of a decendant) See https://www.law.cornell.edu/uscode/text/26/691
What is on an information (or whether one is even received) has nothing to do with a taxpayers duty to include the correct income on their return. The correct taxpayer must file for the correct income.
This seems to be a legal issue, possibly decided by state law. If the estate owed the debt and that debt was forgiven, then it would seem to be the estate's forgiveness of debt income.
However, there are exceptions to the normal rule that forgiveness of debt is income. One that might apply here is insolvency. See https://www.irs.gov/taxtopics/tc431 (scroll to "EXCEPTIONS to Cancellation of Debt Income").
Perhaps the reason the debt was forgiven is the estate was had no money to pay the debt (after the statutory priorities debts were paid, e.g. funeral, lawyers, probate fees).
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