chase sent me a 1099c today

[floridian]

i still havent filed bk... i just recieved a 1099c from chase credit card company... it stated that it was because of debt cancellation on the amount of 10k bucks...

i thought you only got a 1099 if you worked out a deal with an OC... i never had any conversation with chase other than to give them my lawyers name..

ive already done my 2009 income taxes, is this going to be a problem? is this real or a collection ploy??

[catleg]

Lucky guy, I think Chase has "forgiven" your debt.

[forgotten]

i still havent filed bk... i just recieved a 1099c from chase credit card company... it stated that it was because of debt cancellation on the amount of 10k bucks...

i thought you only got a 1099 if you worked out a deal with an OC... i never had any conversation with chase other than to give them my lawyers name..

ive already done my 2009 income taxes, is this going to be a problem? is this real or a collection ploy??

If you got a 2009 1099C, then you will need to ammend your 2009 taxes and either claim insolvency (if you qualify) or pay taxes on the amount.

The 1099C just means they have written off and cancelled the debt, they don't need any type of agreement to do this.

[catleg]

I'm just curious whether the amount they reported on the 1099-c was just the principal balance of your credit card, or if it included interest? You're only supposed to be liable for taxation on the principal amount, which measures the benefit you got and never repaid, and not the interest, which is not considered "income" to you. (They're supposed to itemize it if they do report it). They're never supposed to report penalties like late fees and over the limit fees.

[alironz]

My deceased father received a 1099 c today from Chase. It was for the principal balance only. My Dad died in 2008

[floridian]

it was for only the principle amount... how long do i have to file an amendment, before the IRS will hammer me?

[catleg]

from 2007 taxes i just heard this past october (2009).
So it takes almost two years for them to match up the 1099s.

[Flamingo]

it was for only the principle amount... how long do i have to file an amendment, before the IRS will hammer me?

You don't want to fool with this since they sent it to you promptly (had to be postmarked by 1/31/10) and even though you filed, if you don't amend your tax return with the additional amount you will probably be responsible for interest and penalties after 4/15/10. Call the IRS and ask before you end up owing more due to interest and penalities.

[BCA2009]

If they have 1099'd him, does that mean they cannot attempt to collect the debt anymore?

If you are having to report the debt on your tax return as income because it has been forgiven, I don't see how you could be liable for it anymore.

[floridian]

bca2009, i was wondering the same thing..

my lawyer says that if the 1099 adds to my tax burden, it cant be discharged in bk... he said to have my CPA dispute the 1099 on grounds that im insolvent...

i explained the situation to my CPA and he agreed, that if im legally insolvent that i will not have to pay the tax on the 1099..

i hope the IRS doesnt challange this, as i dont need the stress...

[OHBOY]

'floridian':

As I too have a 'few' cards with 'Chase', (ca. $27,000) that I stopped paying on right about October '09, I am wondering when you stopped paying on your Chase account.

Also, if you don't mind disclosing, for how much was the amount ? (just trying to see if it falls in line with my debt... so that I may anticipate a 1099 as another possible scenario of the unknown).

Did they give you ANY kind of prior indication that they might write this off as 'forgiven' ?

If you fall into the catagory of being considered 'insolvent' than the 1099 sounds sweet. Not so good if one is not 'insolvent' by IRS standards....like me.

THANKS (!) for any additional info.

[floridian]

i owed them about 10k and only got one call from them..i have a smaller chase card and no contact about it... i stopped paying 12 months ago. no mention was ever made on a settlement..

i just wonder if the IRS plays hard-ball on the insolvent definition?

[OHBOY]

Quote by 'floridian': 'i just wonder if the IRS plays hard-ball on the insolvent definition?'


Personally I would not count on anything other than 'hard-ball'

BTW: Thanks for the details pertaining to the 1099 !

[forgotten]

i just wonder if the IRS plays hard-ball on the insolvent definition?

Yes... they are pretty strict on that, and you have a good chance of being audited if you claim insolvency.

However, from Nolo 2008:
Some lawyers have concluded that on the day the creditor settles or writes off a debt, a "taxable event" occurs. This means that if you file for bankruptcy after that date, you cannot wipe out the debt unless your tax debt could be wiped out in bankruptcy. Other lawyers feel that the taxable event occurs on April 15, when your taxes are due, and that you can file for bankruptcy and wipe out the debt before that date, assuming it otherwise qualifies to be eliminated in bankruptcy.

Based on that, if you decide you are not insolvent you could try and file BK before April 15th and file the form with the IRS indicating this debt was included in bankruptcy.

[floridian]

it sounds like chase has screwed me.. it would have been wiped out in the bk, but now i have to worry about the IRS>