QUESTION
Could the bank send me the 1099-C form? How?
Asked on May 25th, 2015 on Taxation - Michigan
More details to this question:
My car was repossessed 6 years ago and the bank has submitted a 1099-C form. I do not think that they can do this. Should the repossession be taken off of my credit report if that money is now being taxed?
2 ANSWERS
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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They are witting off the balance and forgiveness of debt is income to you.
Answered on Jun 08th, 2015 at 9:39 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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The bank can issue a Form 1099-C whenever they determine that they're going to forgive the debt. So the amount on the 1099-C should be any shortage between the amount of the loan and the proceeds of selling the car (the bank calls this the deficiency). The 1099-C is only taxable income, if you're solvent. So if your debts are more than the value of your assets, it's not taxable but you need to report this on your income tax return.
Answered on Jun 08th, 2015 at 9:39 PM