This is for a 2004 fed tax return? Can someone explain?
2007-04-19 13:59:25 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
It seems that the IRS has notified you that you were issued a 1099C. This would have come from a lender. It doesn't need to look like another 1099, it can be just part of a letter. If you did not receive it, ask the lender for a copy. Or, if the IRS has already notified you of the particulars, you don't need a copy since all the needed information has been sent to you from the IRS.
You will need to file an amended return. If you were bankrupt or insolvent at the time the 1099C was issued, you may not have to include the cancelled debt as income. In this case, use Form 982 to document the bankruptcy/insolvency.
Otherwise, include the cancelled debt on Line 21 of the 1040. Income tax is due on this, but no Social Security or Medicare taxes.
2007-04-19 15:13:20 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
I assume it's the IRS telling you this. Sounds like the 1099-C was filed with them, whether your copy actually got to you or not. A forgiven debt, such as a charge-off of a medical or credit card bill, is considered income since you got the goods or services, but didn't end up paying for them.
If you didn't have anything like that, you might want to talk to a CPA to help you deal with this. If your dispute is just over whether or not you received the form, then you probably owe taxes on it.
2007-04-19 18:37:12 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
The forgiver of the debt may not have had your correct address. You will be liable for reporting the income. If you already filed for 2004, you will need to file an amended return.
2007-04-19 14:45:00 · answer #3 · answered by ewetaunt 3 · 0⤊ 0⤋