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posted Mar 3, 2021 4:26:31 PM

cancelation of debt for deceased person

wanting to file my fathers taxes, my mother passed away in 2019 and we filed a return that she died. this year in 2020 she received tax forms for cancelation of debt, 1099c.  how should i file this for him. 

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1 Replies
Expert Alumni
Mar 4, 2021 10:17:34 AM

File your father as single under his social security number only.  Do not include the 1099C unless they are reported to him.   In theory, the 1099C amounts would be included in the income of your mother's estate and the estate would pay the tax.  But if the estate was insolvent (more debt than assets) at the time of the discharge of debt, then the income is not recognized.   For now, I would not include them in your Fathers tax return if they are in your mothers name and social security number.  If you do receive a notice from the IRS for her, indicate the estate was insolvent at the time the debt was discharged, if that was the case.