How do I file a 1099-C Cancellation of Debt for a deceased parent?

My parent died a few years ago. An estate was created to manage their property as a rental and tax forms filed annually. There is no equity in the property and the estate has negative income so the property will either go into foreclosure or short sale. When the 1099-C comes in, how should this be filed? Will I have to report this as income on my tax forms? Are there other forms that should be submitted that will reduce or exclude my tax liability (if any)? Note: the property is still in the parents name/SSI.  

Answer

This will be reported on the Estate tax return, or possibly on your Mother's final tax return. Does the estate have an Employer Identification Number (See attached)  You may need to obtain one if a form 1041 is required to be filed.  However you are not responsible for reporting the 1099-C on your individual return. Click on this link for more information.  Estate

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