Topic: 1099-C Benefit or Not?

[Kizd4AFool]

I just received a 1099-C from BOA for about $2500 of alleged debt.  I don't remember any calls for this account and honestly don't recall an account with BOA.  Should I just it up or is there a way to challenge the 1099-C?  I have about $350,000 in school loans so I'm sure I owe more than I have in assets.

Kizd4AFool

[KFMAN]

What does your CRA's state?

[TomNTex]

A lot has been covered on this board and others about the 1099-C. It comes down to you having to pay taxes on the amount shown. That or show that you were insolvent at the time it was issued. Then you have to fill out forms for the irs.

[KFMAN]

http://www.debtorboards.com/index.php?topic=23466.0

[Kizd4AFool]

KFMAN: Thank you!  I did read that post.  I guess my confusion is if they didn't prove the debt is mine and if it isn't legitimately mine why should I pay taxes on it?

It is listed on my Credit Report at charged off $0.

Thanks!

Kizd4AFool

[mrdoon]

I guess my confusion is if they didn't prove the debt is mine and if it isn't legitimately mine why should I pay taxes on it?

The IRS assumes that information reports like a 1099-C is accurate so they will expect you to claim it as income and pay taxes on it unless you can show that you are excused from paying taxes on it because you were insolvent or the debt was discharged in bankruptcy, etc. 

You'll need to file IRS form 982 to prove that you were insolvent.  Talk to a tax pro if you're not comfortable completing the form on your own.

Good luck!

[Kizd4AFool]

Thank you!  I found that form.  I usually do my own taxes so hopefully it won't be too hard .

Kizd4AFool

[credit_h]

I just received a 1099-C from BOA for about $2500 of alleged debt.  I don't remember any calls for this account and honestly don't recall an account with BOA.  Should I just <Removed> it up or is there a way to challenge the 1099-C?  I have about $350,000 in school loans so I'm sure I owe more than I have in assets.

Kizd4AFool

You have $350000 in school loans? Are you in medical or law school?

[Just Plain Bill]

Here is an interesting case in the United States Tax Court: David Scott Stewart And Annette Stewart v.Commissioner OF Internal Revenue,Docket No. 20374-11S