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FORM 1099-C


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TP and spouse mfj in 2017. TP held cc in his name only. TP deceased in 2017. Spouse notified CC Co of death.  All assets owned by them passed as a right of survivorship. CC Co sent 1099-c in deceased TP's name and ss# in 2018. Box 5 is checked and box 6 has an "e". Question is does spouse filing as single in 2018 have to include this debt?

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It would seem to me in this scenario, the CC should have filed a claim against the deceased's estate which that statute would have run out by now. The spouse filing single is her only option at this time and the 1099C is not included as it is not hers nor under her SS# as you stated.  If the deceased's final return was filed for 2017. then the CC is out of luck. I am assuming the final return was filed as a MFJ return and if the debt was forgiven in 2018, too bad for the credit card company.

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If the deceased taxpayer's estate had assets in excess of liabilities, then the estate was liable to pay the CC debt.

Just because the assets passed by right of survivorship doesn't relieve the obligation to pay.

If it did, every surviving spouse with all assets held jointly would never have to pay any debts of the deceased spouse .

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The CC company wrote off the debt that is why the 1099-C was issued.  What I think you are asking is does the wife have to paid taxes on the 1099-C for 2018.  I would say no because she is filing single and the debt relief was for the past husband.  If there is an estate then the income would go there.

 

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7 hours ago, cbslee said:

Just because the assets passed by right of survivorship doesn't relieve the obligation to pay.

If it did, every surviving spouse with all assets held jointly would never have to pay any debts of the deceased spouse .

Not always, unfortunately.  It depends on the State and the type of asset.  

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I've encountered the same situation and I agree with the above posters.  The cancelled debt is income to the estate.  In no way does it go on the surviving spouse's return.  If the estate has closed and the assets distributed, the beneficiary is liable for the tax.  If all assets passed to the spouse and there was no estate, it was insolvent.

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10 hours ago, cbslee said:

If the deceased taxpayer's estate had assets in excess of liabilities, then the estate was liable to pay the CC debt.

Just because the assets passed by right of survivorship doesn't relieve the obligation to pay.

If it did, every surviving spouse with all assets held jointly would never have to pay any debts of the deceased spouse .

Your last line of all assets held jointly is what is throwing this off. The OP said the CC was in the decedent's name only. That being said, I agree with SaraEA. However, I don't see how a beneficiary is liable for the tax. Especially if the estate is closed. In my opinion, this is still a debt to the estate. The OP doesn't give any amounts so we don't know which way this should be handled. Estate closed? Is or was there an estate? A lot of unknowns here.

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