1099-c

[oregonpilot]

Ok..i got a 1099C in the mail today. Shocked me. From one of my C1's...
the bankruptcy box is checked. Is this just informational info?
I am doing more searching now and finding some answers. Thanks

[tcreegan]

Hi OregonPilot;

My understanding is the lending company needs to generate the 1099s in order to claim the losses for tax accounting. Whether they apply to you is an issue between you and the IRS. For most of us bankrupt folks, the deficieny on the primary residence is not going to be income. I believe BK folks send in the 1099s and form 982 (hope that is close to the right number)

Just my feeble minded understanding of the matter...

Tom in Colo

[despritfreya]

There is no forgiveness of debt income for debt discharged in bk. You report it but file this form:

http://www.irs.gov/pub/irs-pdf/f982.pdf

Hope the link works.

Des.

[RuthCB]

I also received a 1099-C yesterday from Capital One. This is the only one if have received.
I did find this interesting reading on the IRS site. THis is about who should file, etc.:

You are not required to report on Form 1099-C the following:

Certain bankruptcies. You are not required to report a debt discharged in bankruptcy unless you know from information included in your books and records that the debt was incurred for business or investment purposes. If you are required to report a business or investment debt discharged in bankruptcy, report it for the later of:

The year in which the amount of discharged debt first can be determined or

The year in which the debt is discharged in bankruptcy.

A debt is incurred for business if it is incurred in connection with the conduct of any trade or business other than the trade or business of performing services as an employee. A debt is incurred for investment if it is incurred to purchase property held for investment (as defined in section 163(d)(5)

http://www.irs.gov/instructions/i1099ac/ar02.html#d0e193

----
My 1099-C was for a card I used for my business. It was included in my consumer bk since I was personally liable.
I had another Cap One card and I did NOT receive a 1099 for it.

[despritfreya]

the IRS site. THis is about who should file, etc.: You are not required to report on Form 1099-C the following: Certain bankruptcies. You are not required to report a debt discharged in bankruptcy unless you know from information included in your books and records that the debt was incurred for business or investment purposes. . .

So. . . for the most part, the creditor should be determining if the debt was incurred for business type purposes. No wonder a creditor will just issue it. Unless the account is specifically tied to a business how on earth would a creditor know? Many folks use personal credit cards and lines of credit to support a business yet there is no “official” information given to the lender that such is the case. On the other hand, if a lender were to look at the charges, maybe it could deduce that the charges were business related and therefore the creditor could be deemed to have information contained it its books and records showing that the charges were business/investment related. If I were the creditor, for fear of not doing something I was suppose to do, I would simply issue the 1099c and let the taxpayer figure it out.

Des.

[RuthCB]

So. . . for the most part, the creditor should be determining if the debt was incurred for business type purposes. No wonder a creditor will just issue it. Unless the account is specifically tied to a business how on earth would a creditor know? Many folks use personal credit cards and lines of credit to support a business yet there is no “official” information given to the lender that such is the case. On the other hand, if a lender were to look at the charges, maybe it could deduce that the charges were business related and therefore the creditor could be deemed to have information contained it its books and records showing that the charges were business/investment related. If I were the creditor, for fear of not doing something I was suppose to do, I would simply issue the 1099c and let the taxpayer figure it out.

Des.

This card had my name on it, plus the name of the business, so in this case, it was pretty clear to the creditor. You are right though, I did use other personal cards to sustain a struggling business and there was no 1099 issued. Probably since I was well within the percentage limits for filing consumer, maybe it didn't "register".

Now my only thing is... do I file this 1099 with my business tax return, or my personal? I hope my accountant is up-to-date on all this.
Obviously, I'll also do the 982 if it is personal. If it is business, it won't matter if it is income since I took a major loss my last year in business.

[onthefence]

This card had my name on it, plus the name of the business, so in this case, it was pretty clear to the creditor. You are right though, I did use other personal cards to sustain a struggling business and there was no 1099 issued. Probably since I was well within the percentage limits for filing consumer, maybe it didn't "register".

Now my only thing is... do I file this 1099 with my business tax return, or my personal? I hope my accountant is up-to-date on all this.
Obviously, I'll also do the 982 if it is personal. If it is business, it won't matter if it is income since I took a major loss my last year in business.

----
My 1099-C was for a card I used for my business. It was included in my consumer bk since I was personally liable.
I had another Cap One card and I did NOT receive a 1099 for it.[/QUOTE]

We are in the exact same boat - rec'd a 1099-C for the Cap One account tied to our small business (not for the other one that we bk'd) and we discharged the debt since we were personally liable for it. Our business also tanked, so we will also need to figure out if this goes with our personal or business taxes. I suppose I need to put a call into our accountant.....

[RuthCB]

----
My 1099-C was for a card I used for my business. It was included in my consumer bk since I was personally liable.
I had another Cap One card and I did NOT receive a 1099 for it.

We are in the exact same boat - rec'd a 1099-C for the Cap One account tied to our small business (not for the other one that we bk'd) and we discharged the debt since we were personally liable for it. Our business also tanked, so we will also need to figure out if this goes with our personal or business taxes. I suppose I need to put a call into our accountant.....[/QUOTE]

I did some more reading. The site I looked at ( don't have the link now) said if it was a business debt, put it on your Schedule C ( business tax).
That's good for me because my personal taxes are pretty cut and dried. Very simple. I sure don't want to gum it up with extra forms.

[onthefence]

Thanks for the info Ruth!

[RuthCB]

Even more information about how to report a 1099-C on tax forms:

Record the debt from Form 1099-C on Form 1040, Schedule C, if the cancellation of debt is for a business. If the cancellation of debt is for a farmer, report the amount on Form 1040, Schedule F.

Read more: How to Show a 1099C on IRS Form 1040 | eHow.co.uk http://www.ehow.co.uk/how_6397405_sh...#ixzz1CRQ0hmPx

[oregonpilot]

Ok..i got a 1099C in the mail today. Shocked me. From one of my C1's...
the bankruptcy box is checked. Is this just informational info?
I am doing more searching now and finding some answers. Thanks

Thanks Des, Tom and Ruth.
It doesn't look as bad as i thought. My knee-jeck reaction was to panic. I guess i am still reeling from all this and waiting for something else bad to happen.