Form 1099 -C

Hi,

I have just received a 1099-C and I’m assuming this is from our bankruptcy 5 years ago.
the problem is it is in our previous company’s name that was completely closed last year.
of course we were the owners and filed personally not on our business . However we were the personal borrowers. Where do I put it on my return? If it’s for a bankruptcy that is discharged do I list it? Especially since last year was the business was closed and I just got this a few days ago. Thanks for any help!

584

Expert Alumni

Jan 30, 2020 2:17:31 PM

Canceled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception, defined below.

To enter your 1099-C:

Open or continue your return, if it isn't already open.
From the upper right menu, select and search for 1099-C or 1099C (lower-case also works).
Select the Jump to link at the top of the search results.
On the Tell us about your canceled debt screen, select Yes.
Select the type of canceled debt (main home or other) and then select Continue.
Follow the instructions to enter info from your 1099-C.

Exclusions

Debt canceled in a Title 11 bankruptcy
Debt canceled during insolvency (the amount exceeding your assets)
Cancelation of qualified farm or real property indebtedness
Cancelation of qualified principal residence indebtedness, better known as mortgage debt relief

Exceptions

Certain qualified student loans
Money excluded from income by law, such as gifts or bequests
Canceled debt that if paid by a cash-basis taxpayer would otherwise be deductible
A qualified purchase price reduction given by a seller
Any Pay-for-Performance Success Payments that reduce the principal balance of your mortgage under the Home Affordable Modification Program

To determine which apply to you, we recommend you consult a tax professional or see IRS publications 4681 or 544.

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Form 1099 -C