@BlueHeron responses to your follow-up:
- We don't have sufficient details to determine whether the borrower needs to include the income in their tax return.
- Our tax system is a voluntary compliance system, but complicated. Unless the borrower received some type of form, they most likely have no idea that income might need to be reported.
- No benefit in you filing the form 1099-C
- While the IRS would not issue a form 1099-C, should you be audited and the transaction reviewed in detail, the IRS could audit the borrow.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
