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Deanp (talk|edits) said:
| 2 February 2006
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| I had someone call me today and tell me that they had received a 1099 MISC from a company they did not do any work for in 2005. However, that person had filed for bankruptcy and part of the debt discharged was the balance on a loan from a bank. The catch is that the owner of the company from which he received a 1099 was a cosignor on the loan. How does this work?
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Taxref (talk|edits) said:
| 3 February 2006
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| It seems as though the cosigner is attempting to improperly get a business tax deduction for the note payment he was required to make. I have seen this stunt pulled before by an ex-husband trying to write off child support as non-employee compensation to the ex-wife. The taxpayer should ask for a corrected 1099 showing zero payments. If the cosigner refuses to issue a corrected 1099 the receiver has several options he can take.
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Deanp (talk|edits) said:
| 3 February 2006
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| Now, if the loan was related to the business owners business or trade, it can be deducted as a business loss. Am I reading the law right on this?
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