Forgiveness debt for a deceased with no estate

Forum|Forum|7 years ago
May 31, 2019
11 replies
58 views

I received a cancellation debt from bank of America regarding a deceased person with no estate. They said they are going to forgive his debt. He passed-away two years ago. Who will be responsible to pay the IRS with this tax if he is already a deceased with no estate and he is the only borrower of this debt. They know this long time ago that there is no estate nor executor. please advice. Thanks

DJS

Alumni - Champ

If the taxpayer died in 2014, and the debt was cancelled in 2014, then at least in theory, the cancelled debt would have to be reported on the final return of the decedent, i.e., the decedent's Form 1040 for 2014. If the decedent was insolvent at the time the debt was cancelled, then it is not taxable income. You would need to do a Form 982.

However, If the deceased received a 1099-c two years later, but there is no estate and no executor, then based on the individual facts and circumstances there may be no one responsible for filing a tax return with respect to the information returns addressed to the decedent..

Answers are correct to the best of my ability but do not constitute legal or tax advice.**If this post is helpful please click on "thumbs up"**

m1tinaAuthor

Level 2

anymore suggestions. because in the letter sent by BofA, they will report this cancelled debt to IRS. So who will be the responsible person to file this to the IRS when the deceased was only the borrower? Should I just not do anything since I am not the executor nor the representative of the deceased? And since there is no Estate at all.