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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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I settled a credit card debt in 2011. However, the credit

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I settled a credit card debt in 2011. However, the credit card company did not send me a 1099-c to report the cancelled debt as income. As a matter of fact, the company said they had three years to send me my 1099-c and that they were not sure when they would send my 1099-c. Should I include my estimation of cancelled debt to this year's income taxes or should I wait until I receive a 1099-c in the future and then file?
Submitted: 2 years ago.
Category: Tax
Expert:  Wallstreet Esq. replied 2 years ago.

Wallstreet Esq. :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification

Wallstreet Esq. :

You should wait for the actual 1099-c as the IRS will not have any evidence of the debt, until the 1099 is actually issued,

Wallstreet Esq. :

Also, be aware,

Wallstreet Esq. :

If you receive a Form 1099-C but the creditor is continuing to try to collect the debt then the debt has not been cancelled and you do not have taxable cancellation of debt income.

Customer:

Citibank told me that the account has been settled and the company they hired to collect the debt has also told me that the debt was settled. So, I am not concerned about the continuation of the collection process. However, does this mean that when I finally get a 1099-c, sometime in the next three years, I will need to go back and file an amended 2011 tax return?

Wallstreet Esq. :

no, it would b canceld as of the date of the 1099c

Wallstreet Esq. :

so you would declare it at that time

Customer:

Makes sense. Thanks for you time and expertise.

Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 15822
Experience: 10 years experience
Wallstreet Esq. and 3 other Tax Specialists are ready to help you

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