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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29919
Experience:  Taxes, Immigration, Labor Relations
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My name is ***** ***** and I have a question about a 1099C.

Customer Question

my name is ***** ***** and I have a question about a 1099C. My daughter defaulted on a student load that I cosigned for. I paid it with money from my IRA. I got a 1099C for the amount written off (10,000.00) and so did my daughter, but she also got a 1098 for 15000. interest paid. Why did both of us get the 10000. hit but only she got the interest deduction?
JA: Thanks. Can you give me any more details about your issue?
Customer: Do both of us have to add the 10000 to our taxable income? Seems like only one of us should have to.
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

You stated that you PAID your daughter student loan - correct?
If so - that is why your daugher received form reported her student loan interest.

As you likely not paid the full loan and it partially form forgiven - that is why you received 1099C reported forgiven amount.

Because you both were responsible - multiple debtors - each received that reporting forms - that is based on requirements.

Expert:  Lev replied 1 year ago.

Generally that forgiven debt may be excluded - if you or your daughter is insolvent - but you may not exclude it - ONLY one person is included it into income - not both.


Regarding student loan interest deduction - you also may be eligible to deduct it if at the time the loan was taken your daughter was your dependent.


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