mom died in 2018 but received income in 2019 in th...
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Returning Member

mom died in 2018 but received income in 2019 in the form of a forgiven debt. Do I have to file a return for 2019 ?

The amount was $13,290 and was forgiven by Discover Card.  I received a 1099C-Cancellation of debt form.  But my mother died in December of 2018.  Im very confused...……..this seems like an odd situation.  She would not owe tax on this anyway because her standard deduction would erase the debt amount. 

 

Any help would be appreciated.

2 Replies
Employee Tax Expert

mom died in 2018 but received income in 2019 in the form of a forgiven debt. Do I have to file a return for 2019 ?

If the taxpayer died in 2018, and the debt was cancelled in 2018, 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 2018. 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 a year 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.

 

If there is an estate, the income would need to be reported on Form 1041 for the estate tax return.

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Returning Member

mom died in 2018 but received income in 2019 in the form of a forgiven debt. Do I have to file a return for 2019 ?

Thank you for your reply.......my mother dies penniless......her home was underwater, her car was totaled, she had no savings, no life insurance, no investments.  Only $30,000 of unpaid credit card debt.  So i will not be filing 2019 taxes for her.

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