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Today I received an IRS Form 1099-C from Investment

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Retrievers for a debt I...
Today I received an IRS Form 1099-C from Investment Retrievers for a debt I incurred 6 years ago, and settled earlier this year. The debt was $5,100 that I settled through Investment Retrievers for $1,800. Two years ago, I received a 1099-C for the $5,100 (untaxed income) from Honda Finance Corp, to whom I owed the $5,100 before it went into collection, and paid the required tax on it in my 2015 tax return.. Why is Investment Retrievers sending me another 1099-C this year for the same debt minus the $1,800 payment I made through them? Wasn't my tax responsibility on this debt met two years ago?
Submitted: 10 months ago.Category: Tax
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1/24/2017
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 10 months ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,362
Experience: Certified Public Accountant
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Hi, my name is Mark. I will be happy to help you with your questions. The lenders are not very good about accurately reporting the 1099-C especially if the debt has been sold. Based on your description it sounds like you have already recognized the cancellation of debt income in 2015. You would need to report the $3,300 of cancellation of debt income as other income on your 1040. You would want to offset this amount by $5,100 in a separate item. You would want the descript to say that the cancelation of debt was recognized in 2015.

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