topic Re: 1099c in Get your taxes done using TurboTax

1099c

JW47 — Thu, 25 Feb 2021 16:55:08 GMT

I received a 1099c for a truck loan I had with my husband before our divorce in 2015. In the Divorce Decree he kept the truck and I kept our other vehicle. He is still in possession of the truck at this time. Does this mean he files the whole amount of cancellation since he would have the income (benefit) of having the truck? Would I file $0 since I do not have income or benefit from the truck?

Re: 1099c

JohnB5677 — Thu, 25 Feb 2021 17:28:10 GMT

Unfortunately if the 1099-C was issued to you it will have been reported to the IRS under your Social Security Number.

If your name is listed on a loan, as a borrower. You’re 100% responsible for the debt from the lender’s perspective. Even if you're divorced and your former spouse agreed to handle the debt.

Re: 1099c

JW47 — Thu, 25 Feb 2021 19:04:14 GMT

Can I file insolvent? And how do I do that? Is it different if I were a cosigner?

Re: 1099c

JoannaB2 — Thu, 25 Feb 2021 19:41:27 GMT

Form 1099-C is a tax form required by the IRS mostly used by creditors such as banks, credit unions, and other financial institutions to report cancellation of debt where debts have been forgiven or canceled. Normally, debts that have been forgiven or cancelled are taxable to the debtor.

You may not include the debt cancelled if you're insolvent (Liabilities are more than assets). If you're insolvent or financially unable to pay your debts, you may need to consult a lawyer.

There are exceptions to not including the form 1099-C on your income: if the person is on bankruptcy proceeding or filed certain bankruptcy.

See, 1099-C, link for more information.