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Pleasehelp11 · Feb 7, 2011, 02:19 PM

Just Looking · Feb 7, 2011, 02:43 PM

A Form 1099-C is issued when a debt of $600 or more is forgiven. It normally comes from a bank, credit union, the Federal Government, or a finance or credit card company.

It generally belongs on the Other Income line item of the 1040. I say generally because there are some exceptions. Do you know what it is for? There is a part (box 4) where they can indicate what is being forgiven. If your mother had enough taxable income to submit a return if she were alive, a return will need to be submitted.

I hope that answers your question. If not, please ask again. I had to file returns for my mother and father after their deaths so I know the rules pretty well, plus I am a CPA.

ebaines · Feb 7, 2011, 02:46 PM

The executor of your mother's estate is responsible for filing the estate's income taxes, so if you are not the executor you should pass the 1099-C on to the person who is. Assuming her estate is still in probate, any taxes due are paid out of the estate's assets.

Pleasehelp11 · Feb 7, 2011, 08:00 PM

Thanks!
OK so I have to pay taxes on it. Do I have to pay for it, the debt?
Her estate is not in probate court.
@Just looking - one says retail credit card and other says a combination of # and letters.

Thanks so much I know nothing, and am scared my sibling and I will end living in the streets.

Just Looking · Feb 7, 2011, 08:13 PM

The debt has been forgiven. You don't have to pay that amount. Did your mother have someone handling her affairs - an executor (could be you, your sibling, another relative, an attorney, or someone else)? If so, as ebaines said, give them the form. If you are handling your mother's affairs, we can go from there with responses.

I know it is scary. If you want to tell us more of your family situation, we might be able to give you advice there as well.

Pleasehelp11 · Feb 8, 2011, 01:36 PM

Details: Our mother died unxpected with no will. I guess I should be the executor as my sibling is 15 years. THe house we are living at is under my moms name, it is not paid and has not been to probate court. The worst part is that all the debt belonged to the church members she signed loans,credit for.

I have been told and I have to pay for all the debt. But now that I am receiving these 1099 forms I'm wondering if the house has been sold and I don't know about.

Thank you so much for help.

ebaines · Feb 8, 2011, 01:54 PM

PH11: first, be aware that the executor must be named and approved by the probate court. It sounds like you are the logical choice, but you have no authority to manage the estate's assets until you are so named.

I don't follow what debt you are referring to. Did she loan money to a church? Or did she borrow money from the church? It's not clear.

Any debt that your mother owed is her debt, or more accurately now the estate's debt. It is NOT your debt. You have no responsibility to cover your mother's debts.

As for the house - it's possible that it was foreclosed on if the mortgage has not been paid for some time. The fact that you are unsure about that is problematic - the executor has a responsibility to notify all debtors (like the mortgage company) that your mother is deceased, and the executor needs to figure out how the debts will be paid, which may involve selling the house.

Pleasehelp11 · Feb 8, 2011, 02:11 PM

Ok I am beginning to follow.

What I meant is that the debt that she left was because she allowed members of her church use her credit.It has not been foreclosed as I am currently making mortgage payments.