If debt settlement is reached with credit card companies, when will they generally complete the 1099C? I have received two different answers. The first is once the settlement has been reached. The second is when the account is actually closed. We have two accounts which we are considering settling. Cannot afford the taxes ramifications on "both" in the same year. Should we settle one in 2010 and pay on that year’s tax return and settle the other in 2011 to spread out the IRS payments?
The debt would be in excess of $600.
Under IRS rules, a creditor only has to file a 1099C when the amount charged off is in excess of $600.
The IRS also states that all persons who have had a debt charged off must file a 1099C no matter what the amount.
Go to the site I have referenced (to PROVE my answer) in the source area to read more about the 1099C. There are some cases where the reporting would be tax exempt.
on Sep 9th, 2009 at 11:03 am
When they legally can’t pursue you anymore. This is covered by state law and I believe at least one state has a 10 year statute.
I’ve seen some 1099-Cs that showed up 4 years after someone died.
References :
on Sep 9th, 2009 at 11:49 am
Under IRS rules, a creditor only has to file a 1099C when the amount charged off is in excess of $600.
The IRS also states that all persons who have had a debt charged off must file a 1099C no matter what the amount.
Go to the site I have referenced (to PROVE my answer) in the source area to read more about the 1099C. There are some cases where the reporting would be tax exempt.
References :
http://nolo.com/article.cfm/ObjectID/63E64ADE-B509-4850-803EAFC794283FC0/