topic Code G in Get your taxes done using TurboTax

Tax Year Prior to 2020: Can a creditor send a 1099c 3 years after the statute limitations expired?

kfrank1 — Thu, 18 May 2023 21:09:01 GMT

What is the time frame that creditors have to send a 1099-c?

Based on the information below, the creditor may not have...

DianeW — Thu, 06 Jun 2019 15:45:02 GMT

Based on the information below, the creditor may not have cancelled the debt at that time. If the Form 1099C is dated 2017, this would indicate the debt was not cancelled until 2017, which means it is required to be included on your tax return. If the Form 1099C has a date for a prior year, then it should be included on that tax return.

If you have documentation that the debt was cancelled in an earlier year, it was included on your tax return for the year of cancellation and a document was never received by the creditor, you can retain those records with your tax return as proof. If it was part of bankruptcy, and therefore not required to be taxable income, also retain those records. In either of these scenarios you can enter the income, then enter a negative miscellaneous income to cancel it out.

If it was never reported as cancelled debt and it was not part of bankruptcy, then it must be included in your income tax return for the year shown on the Form 1099C.

Filing Requirements for Form 1099C: In accordance with Internal Revenue Code (“IRC”) §6050P, discharges of indebtedness of $600 or more during any calendar year, must be reported to the Internal Revenue Service (“IRS”) on Form 1099-C. Entities that must file Form 1099-C include financial institutions, credit unions, the Federal Deposit Insurance Corporation or any organization whose significant trade or business is the lending of money. However, the IRC does not state that these are the only entities that can file such returns. IRS Service Center Advice (SCA) 1998-020 states that “an individual or entity not required to file a Form 1099-C under §6050P of the IRC may nevertheless voluntarily file the form.” Such reporting may encourage voluntary tax compliance and proper gross income inclusions now and in the future.

Debt is considered canceled or discharged on either an identifiable date that an event occurs or the date of actual discharge, if earlier.

The following are identifiable event codes that would be utilized for reporting in box 6 of Form 1099-C:

A – Discharge in Bankruptcy under Title 11.
B – Judicial debt relief which makes a debt unenforceable in receivership.
C – Statute of limitations or expiration of deficiency period.
D – Foreclosure election.
E – Debt relief from probate or similar proceeding.
F – By agreement between creditor and debtor (e.g. short sale).
G – Decision or policy to discontinue collection.
H – Expiration of nonpayment testing period (applies only to entities who must
file).
I – Other actual discharge before identifiable event.

You can add a comment if you have more questions.

So just trying to clarify, the statute of limitations exp...

kfrank1 — Thu, 06 Jun 2019 15:45:04 GMT

So just trying to clarify, the statute of limitations expired 3 years ago, the creditor issued a1099c for 2017 tax year for me to claim on my 2018 taxes. I still have to claim that as earnings on my taxes?

@kfrank1 Yes (exceptions noted). You can contact the IRS,...

DianeW — Thu, 06 Jun 2019 15:45:06 GMT

@kfrank1 Yes (exceptions noted). You can contact the IRS, but expect the same result.

@kfrank1 What Statue of Limitations are you referring to?

TaxGuyBill — Thu, 06 Jun 2019 15:45:07 GMT

@kfrank1 What Statue of Limitations are you referring to?

Statute of limitations to recover a debt

kfrank1 — Thu, 06 Jun 2019 15:45:09 GMT

Statute of limitations to recover a debt

Follow-up question, this debt is from a house that burnt...

kfrank1 — Thu, 06 Jun 2019 15:45:11 GMT

Follow-up question, this debt is from a house that burnt down in 2004 that my husband and his ex-wife had a loan on. They each received a 1099 C for the entire amount. How is it decided who pays what for their portion of the taxes?

Be aware that limitation can be tricky to determine in ma...

TaxGuyBill — Thu, 06 Jun 2019 15:45:12 GMT

Be aware that limitation can be tricky to determine in many states.

If the Statute of Limitations actually did expired 3 years ago, they should have sent you a 1099-C for that year, and you would need to pay taxes on it for that year.

Which Code is on the 1099-C?

They are both responsible for it, but in most cases they would each claim half. However, I've read situations where if both parties don't claim half, the IRS will keep coming after both parties until 100% of it has been reported.

TG Bill, this is a loss from 13 years ago. Can they actua...

Carl — Thu, 06 Jun 2019 15:45:14 GMT

TG Bill, this is a loss from 13 years ago. Can they actually issue a 1099-C for the 2017 tax year, as has been indicated here? Something seems wrong with this scenario.

Code G

kfrank1 — Thu, 06 Jun 2019 15:45:16 GMT

Code G

The ex says she can't pay for any of it. Is there a way t...

kfrank1 — Thu, 06 Jun 2019 15:45:18 GMT

The ex says she can't pay for any of it. Is there a way to ensure she is responsible for half?

@kfrank1 According to IRS Publication 4681, "Code G is us...

DianeW — Thu, 06 Jun 2019 15:45:20 GMT

@kfrank1 According to IRS Publication 4681, "Code G is used to identify cancellation of debt as a result of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt.

If the debt was longer than 36 month., and I end up payin...

ang2182928 — Thu, 06 Jun 2019 15:45:21 GMT

If the debt was longer than 36 month., and I end up paying it after that can they still send me a 1099 - c?

You're asking a legal question. We can't offer legal advi...

Carl — Thu, 06 Jun 2019 15:45:23 GMT

You're asking a legal question. We can't offer legal advice. All we can do is tell you that if you received a 1099-C, you are required to report it on your tax return. For the legalities of it, seek legal advice from a competent attorney.

Received a 1099-C for 2017 tax year, but the date in "box...

cjc0101-- — Thu, 06 Jun 2019 15:45:25 GMT

Received a 1099-C for 2017 tax year, but the date in "box 1" is July of 2012. Do we report the COD in that year? And, will we benefit from the mortgage debt forgiveness laws that were in place at that time?

If the box to the right of boxes 1, 2 and 3 has the numbe...

Carl — Thu, 06 Jun 2019 15:45:27 GMT

If the box to the right of boxes 1, 2 and 3 has the numbers (2017) in it, then this is reportable on your 2017 tax return.

Carl - then what is the significance of the date in box 1?

cjc0101-- — Thu, 06 Jun 2019 15:45:28 GMT

Carl - then what is the significance of the date in box 1?

@cjc0101!! The significance is for and from the issuer/ow...

DianeW — Thu, 06 Jun 2019 15:45:30 GMT

@cjc0101!! The significance is for and from the issuer/owner of the loan. Box 1, Form 1099C. Shows the date the earliest identifiable event occurred or, at the creditor's discretion, the date of an actual discharge that occurred before an identifiable event. See the code in box 6 - .
A—Bankruptcy;
B—Other judicial debt relief;
C—Statute of limitations or expiration of deficiency period;
D—Foreclosure election;
E—Debt relief from probate or similar proceeding;
F—By agreement;
G—Decision or policy to discontinue collection; or
H—Other actual discharge before identifiable event

Basically, the date in box 1 has no meaning or significan...

Carl — Thu, 06 Jun 2019 15:45:32 GMT

Basically, the date in box 1 has no meaning or significance for you. It's for the issuer of the form.

Often times these 1099-C received for a debt that has not...

rkghidossi — Thu, 06 Jun 2019 15:45:33 GMT

Often times these 1099-C received for a debt that has not been paid on for several years are easy to defeat.