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Level 2
posted Jan 25, 2020 5:48:50 PM

Sending a 1099-c to a debtor

I am filling out a 1099-C to send to a debtor.  I am cancelling just over $5,000 in debt owed to me.  On box 7 of the form 1099-C, it states "Fair market value".  Would that be the full loan amount of $5,000?  Since I didn't have any property to take back and sell, there was nothing of value ever given to me.  I never received anything back from the loan.

0 2 1016
2 Replies
Not applicable
Jan 25, 2020 5:54:16 PM

are you supposed to file?  see page 3 of this link

 

 

https://www.irs.gov/pub/irs-pdf/i1099ac.pdf

Level 2
Jan 25, 2020 5:59:31 PM

In order for me to write-off the debt as noncollectable, I have to use that form.  It's just not the clearest instructions, and I dread having to call the IRS to try to get an answer.