Tax time, 1099, insolvent
Tax time is here and we had about 15000 worth of forgiven debt this year by 2 of our creditors. They have advised me that I will be getting a 1099 from them. My question is, do I enter these amounts on my return? Or, based on the fact that I was insolvent by about 70000 do I just leave them off. Also, in figuring insolvency, what do you include as assets? Is it your house, cars etc. or is it everything you own, like your tv and furniture and bed? Thanks alot.
snozuloz - Welcome to the site! I'm glad you've been able t
snozuloz -
Welcome to the site! I'm glad you've been able to find some useful information here, and I'm glad you decided to register.
You will receive a free phone consulation with a debt counselor soon - they might be able to answer some of your debt-related questions.
I'm sure some of our members who know the tax laws regarding insolvency and 1099's from settled or forgiven debt will come on and post some advice for you. Hang in there and keep checking back here for more information!
I believe that if you are 1099'd by a company, you do need to in
I believe that if you are 1099'd by a company, you do need to include this as income on your 1040. This form also is sent to the IRS as a W2 would, but you would put it on a separate line on your return--not in the same place you would put your income from wages.
You are also required to pay taxes on this income like you would with wages, so hopefully you had extra taxes taken out at your job?
You also might have to fill out different forms to report this, but I would check with a tax professional on that one.
1099 income can be reported on your Form 1040 when you file - no
1099 income can be reported on your Form 1040 when you file - no special form required.
Depending on what it is--if they consider it to be a capital gai
Depending on what it is--if they consider it to be a capital gain then you would need a different schedule (forgot what it is), but if they consider it to be equivalent to wages, then you wouldn't need one.
Ok, but if you are insolvent, is there some form or a spot on t
Ok, but if you are insolvent, is there some form or a spot on the 1040 where you enter the forgiven amount and then show that you were insolvent by more than that amount, or do you just not enter it on your 1040?
You would still have to enter it, because the IRS was notified o
You would still have to enter it, because the IRS was notified of it via the 1099 and will treat it like income. If you don't, you run the risk of getting notices on it later. You really can't treat it like a loss, since it wasn't, but based on other information on your return, the IRS could see that you were insolvent--meaning that your debts outweighed your income.
Foreclosed on piece of vacant property this past year. Received
Foreclosed on piece of vacant property this past year. Received a 1099 A form but not a 1099 C form. Do I need both. What are tax implications, If I can prove insolvency.