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1099-C Cancellation of Debt for spouse

Spouse used credit card for business expenses that he would report to his employer for reimbursement.  The year after his death (2022) credit card companies issued 1099-C in his name and SS.  The surviving spouse is was not legally on the credit card.  They live in Texas, a community property state.  Is the surviving spouse responsible to report cancellation of debt on 2023 tax return?  There was no Estate tax return filed since all assets were transferred to survivimng spouse.

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ThomasM125
Expert Alumni

1099-C Cancellation of Debt for spouse

Technically, only half of the income would belong to the spouse since the cancellation of debt was for a period of time the taxpayer was alive. Also, since the surviving spouse is not listed on the Form 1099-C, it is unlikely the IRS will pursue the matter against her.

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4 Replies
DianeW777
Expert Alumni

1099-C Cancellation of Debt for spouse

It appears the property of the deceased automatically transfers to the spouse in a community property state. It must be reported on the individual return or the estate would be responsible for reporting the cancelled debt. 

 

An estate return is not required unless the amount of income is $600 or more, so if by chance it's less that return would not be required.

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1099-C Cancellation of Debt for spouse

it may be too late now, but those expenses that were eligible for reimbursement should have been submitted to his employer. Then the CC companies should have been paid. 

1099-C Cancellation of Debt for spouse

Thanks, you are correct.  Spouse did not keep the best records and recreating the last receipts to send to the company is problematic.  Assuming they would even consider reimbursement.

ThomasM125
Expert Alumni

1099-C Cancellation of Debt for spouse

Technically, only half of the income would belong to the spouse since the cancellation of debt was for a period of time the taxpayer was alive. Also, since the surviving spouse is not listed on the Form 1099-C, it is unlikely the IRS will pursue the matter against her.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"
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