I settled 4 credit card accounts in
2018, but as of today, 3/15/2019, only received one 1099-C form. I am missing
three of the four 1099-C forms. The amount forgiven on each account was more
than $800. Also, I am insolvent on each account after each cancellation of
debt.
Question(s):
1 - Do I report the debt forgiven for the accounts I did not receive a 1099-C
form for? I am inclined to do so since the tax deadline is fast approaching. TurboTax allows you to enter multiple 1099-C
forms manually, including the worksheets & 982 for each respective account.
2 – Is there harm in reporting the
cancelled debt even if the IRS did not receive the 1099-C from the creditor? Won’t
this show I am being transparent and erring on the side of caution? If the IRS
does receive one of the 1099-Cs, it will show I reported it in a previous year,
minimizing additional penalties?
3 - What if I receive the 1099-C in a different year, say 2020, but the “identifiable
date” was in 2018? Do I amend my 2018 taxes since that was the year my account(s)
were settled and was insolvent when that particular account was settled? (Have
documentation showing the date/year accounts were settled if the 1099-C shows
otherwise.)
4 – Since I was insolvent, do I need to enter the amount of debt forgiven for State (California) taxes even if it was
not included in the IRS 1040? What line on state tax form? Or is there a place for this on TurboTax?
5 - Do I mail in my taxes for both federal and state including the
worksheets and supporting documentation for insolvency and help expedite
tax process? Or should I e-file and wait for them to request addition
information?
Thank you.
