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We received a 1099-C form from CitiFinancial. My husband

Customer Question
believes it's from a vehicle...
we received a 1099-C form from CitiFinancial. My husband believes it's from a vehicle he and his ex-wide let go back to the seller approx. 8 years ago.
JA: The Accountant will know how to help. Please tell me more so we can help you best.
Customer: this year we've attempted to repair my husbands credit (ourselves). We noticed a reporting for the exact same about from to different parties. We assumed the debit was sold to a debit collector and both the original lender and the collector filled the amount on his credit. Therefore we disputed the claims, pointing out that it was a duplicate debit. The credit company agreed and removed it from the credit (credit report, or however that works)... Now we're receiving a 1099-C form from CitiFinancial
JA: Is there anything else important you think the Accountant should know?
Customer: Can we dispute this 1099-C form?
JA: I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.
Customer: How should we proceed with addressing this?
Submitted: 1 year ago.Category: Tax
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3/30/2016
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,239
Experience: Extensive Experience with Tax, Financial & Estate Issues
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OK, you said it was on the credit report twice, so you were able to have the duplication removed, most likely the one from the collection agency. Is that correct?

Does the debt from CitiFinancial still appear on the credit report or has that now been removed and replaced by the 1099-C that you received?

Is there a date on the 1099-C and if so, what is it?

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Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Is there a date on the 1099-C and if so what is it?

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Customer reply replied 1 year ago
Both of them were removed. 1 from the original collection company and 1 from the debit collection company the debit was assumedly sold to.We haven't logged back on to view the credit report, for our 30 (once a year) viewing window has expired. We will now have to pay to view the report again.
Customer reply replied 1 year ago
it says date of identifiable event "06/18/2015"
Customer reply replied 1 year ago
Also, we haven't called CitiFinancial yet. I wanted to be prepared and asked educated questions. I assume it will be a chore to talk to the correct person
Customer reply replied 1 year ago
for the life of me I can not locate the credit report we printed out some months back to verify the original dates from when the loan / abandonment took place. It was approx. 8 years if I remember correctlyAlso, per their divorce papers any residual tax debit would be shared with my husband and his ex-wife. Therefore in the event we do actually owe taxes on this the responsibility would be shared.... would have no idea how to proceed with that
Customer reply replied 1 year ago
correction *
We haven't logged back on to view the credit report, for our 30 *DAY* (once a year) viewing window has expired. We will now have to pay to view the report again.
Customer reply replied 1 year ago
correction *
for the life of me I can not locate the credit report we printed out some months back to verify the original dates from when the loan / abandonment took place. It was approx. 8 years *AGO* if I remember correctly
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Well, unfortunately, unless you were insolvent on 6/18/2015, there's not much that can be done with the 1099C income except include it in your tax return.

The way that works (shared responsibility) as far as the IRS is concerned, they will attempt to charge both parties with the full amount of the debt forgiveness.

Depending upon how the wording is structured in the divorce agreement, this isn't a repayment of debt, it is as you describe a "forgiveness" of debt by the lender which is taxable income to the borrower(s).

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Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Any agreement between the parties to the divorce is just that, between the parties; it doesn't bind the IRS to anything. So, they attempt to take the path of least resistance. This happens all the time. Do you know if both your husband and his ex-wife were on the title to the vehicle?

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Customer reply replied 1 year ago
both parties would have to pay the full amount?Yes, both names were on the vehicle.Is there any way to postposed this tax?
all sorts of unfortunate tax nightmares took place in 2015 and he now owes 13k I know that's unnecessary info, but just expressing my desperation
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

As far as how to proceed with sharing the tax burden, the first thing that would be necessary is to find out if his ex-wife also received a 1099-C. If she wasn't on the note initially she wouldn't have received one. Since you just noted she was on the title, most likely she was on the debt.

What you would do on your tax return is to list the 1099-C in the full amount and then

on the next line you would indicate "Less Amt Rep by co-tenant, Sally Smith###-##-####& subtract out 1/2

Then on the 3rd line you would indicate "Amount of 1099-C Rep on this return

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Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

No, there's no postponing it if the date on the 1099-C is 6/18/2015

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Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Can your husband tell if they included the full amount of the note or just the amount left after giving credit for the vehicle that was repossessed?

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Customer reply replied 1 year ago
okay. thank you.
what is "Amount of 1099-C Rep" ?It is the full amount. ($6,884.29)Also, some of the total owed taxes are due to an error on 2013 tax reporting. He failed to report that the money in an HSA account was actually spent on health care and therefore got taxes. I have to figure out how to go back and correct that, without any of the 2013 tax paperwork
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Rep stands for "Reported"

We have to abbreviate all the time & the IRS pretty much knows them all

For example rental property is often listed as WFD &*****

where WFD or W/F/D stands for "Wood Frame Dwelling"

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Customer reply replied 1 year ago
I see. thank you
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

If you have any follow-up questions you can come back here & ask me. Even after we are done, you can access this question to follow-up on the same topic;

Please take a moment to rate my response as that is the only way we receive credit for our share of your payment.

Thanks very much,

Steve G.

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Customer reply replied 1 year ago
Thank you, Steve!
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

OK, thanks for using JustAnswer.com

If you want to reach me again here at JustAnswer.com on any other financial or tax matters, just ask for "Steve G" at the beginning of your question.

Steve G.

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