My father died 12/21/04 and my mother received a 1099-C recently for a home equity loan in his name that had been forgiven.
I understand that, with a few exceptions, income from a cancellation of debt would be included as “Other Income” on the 1040.
But several things are confusing about this:
-
Since he died in the tax year 2004, their final joint return was filed in April 2005.
-
I think the debt was forgiven in the 2005 tax year. Why is she just getting this for the 2006 tax year?
-
It has only my father’s name on it. If she DOES need to include it as other income, the social security numbers won’t match (the one on the 1099C and the one on the 1040).
-
Does my mother need to file a tax return for 2006 for someone who died in 2004?
I’ve looked on the IRS website, in a couple of detailed tax manuals, and several other websites. I can’t find anything on deceased people receiving a 1099C.
If anyone has a Master Tax Guide lying around (I just threw mine out from last year…grrrr!), would you mind seeing if there is anything in there about this?
I’ve done taxes for a couple of CPAs before, but this has never come up in any of the returns I’ve done.
It’s a complicated question, I know. But I was hoping a Doper would have an answer.
I’m bumping this in case the right person hasn’t seen it yet. I really don’t want my retired mother to have to pay for an accountant, but it’s starting to look like I won’t be able to help her. I also understand that any advice I get here should be verified. I have a connection with one of the CPA firms I worked for, but I didn’t want to appear to be getting free tax advice.
I don’t have your answer, sorry. But have you considered calling the IRS? Here’s a page with contact info that has a link at the bottom to find walk-in locations in your area.
Since you are trying to do the right thing and not skirt any taxes, I don’t see why they wouldn’t be willing to help.
FWIW I have called the IRS before with questions about my business’s taxes and they were very nice and helpful.
The last time I called the IRS (about a month ago), I was on hold for about 45 minutes before I spoke to someone and ate up my entire lunch hour.
It looks as though I’ll be calling them tonight. It takes away time from my baby, but if my mother called, she would be confused. She’s not senile, she just doesn’t understand taxes at all. I’ve been doing her taxes for years, so she didn’t have to.
Thanks for the suggestion. 
Yeah, give it a shot. The IRS is very busy at different times. A month ago people were still just getting their W2’s and 1099’s and scrambling to file early, so the IRS was probably fielding a lot of calls then. My guess is that it has died down considerably now.
I thought they only went back 7 years. Is there a limitation on how far back they can go? I’d go talk to a tax expert before talking to the IRS.
There’s NO statute of limitations for zombie threads, however.:smack:
Wow, missed that. I’m hoping the zombie bite doesn’t get infected.