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Forgiveness debt for a deceased with no estate
I received a cancellation debt from bank of America regarding a deceased person with no estate. They said they are going to forgive his debt. He passed-away two years ago. Who will be responsible to pay the IRS with this tax if he is already a deceased with no estate and he is the only borrower of this debt. They know this long time ago that there is no estate nor executor. please advice. Thanks


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Forgiveness debt for a deceased with no estate
If the taxpayer died in 2014, and the debt was cancelled in 2014, then at least in theory, the cancelled debt would have to be reported on the final return of the decedent, i.e., the decedent's Form 1040 for 2014. If the decedent was insolvent at the time the debt was cancelled, then it is not taxable income. You would need to do a Form 982.
However, If the deceased received a 1099-c two years later, but there is no estate and no executor, then based on the individual facts and circumstances there may be no one responsible for filing a tax return with respect to the information returns addressed to the decedent..
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