Discussion:1099C from deceased wife's credit card debt
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Discussion Forum Index --> Advanced Tax Questions --> 1099C from deceased wife's credit card debt
Discussion Forum Index --> Tax Questions --> 1099C from deceased wife's credit card debt
| 27 February 2009 | |
| I have a client whose spouse died in 2008. He has received several 1099C's with his deceased wifes SS# on them. Does he have to claim these as taxable income or can he file a MFS return and not claim the income? The debt that was forgiven is all credit card debt. | |
| February 27, 2009 | |
| I believe that should go onto the her estate tax return. Not the individual tax return. | |
| 27 February 2009 | |
| While you're waiting for additional answers, you might take a look at this discussion: Debt Cancellation of Deceased Taxpayer. I will warn you up front, it's a little confusingly worded but in the end we determined that the deceased was the wife and the husband was the surviving spouse. Skip past all that and start with the posts from Mscash and Lhhesscpa and the rest down to the end, and then read the earlier posts, too, to get the whole picture. | |
| 28 February 2009 | |
| I think the answer to this requires a legal opinion as to whose debt it is. If it's a separate debt of the wife, I think the husband could file MFS and not report the COD income on his return. However, regardless of the name on the 1099-C, if it's a joint debt or community property, he would have to report 1/2 of the the COD income on his MFS return. -- Larry Hess, CPA | Albuquerque, NM | |
| 1 March 2009 | |
| I believe that there is case law to suggest that the estate is responsible for reporting this income in cases where creditors are time-barred from collecting on the debt. | |
| 1 March 2009 | |
| Riley, I think that if the husband is the sole heir of the deceased wife, there could be transferee liability attributed to him. And if there was no probate, an estate wouldn't have held any assets. Another reason an attorney would be needed as well as more facts to help figure this one out. -- Larry Hess, CPA | Albuquerque, NM | |
| 1 March 2009 | |
| I disagree with the statement that 'without probate, an estate doesn't hold any assets'. | |
| 1 March 2009 | |
| Okay. Please expand on your disagreement, Kevin. I'm no lawyer. I could learn from what you know or even you're thinking. -- Larry Hess, CPA | Albuquerque, NM | |
| 1 March 2009 | |
| Dennis and I had a disagreement about this about 2 years ago, so maybe New York state law has a technicality in it. I'll find the discussion and link it. The search terms are 'what is an estate Dennis Kevinh5' | |
| 1 March 2009 | |
| Discussion:Estate technicality - What is an estate? | |
| 1 March 2009 | |
| I would not take Dennis' stopping answering as admission of anything. He simply stopped being amused by the thread. | |
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