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I received a 1099-C (Cancellation of Debt) for a decedent…

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I received a 1099-C...

I received a 1099-C (Cancellation of Debt) for a decedent with the decedents SSN. Would I (should I) report this on the 1041 estate return?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Mother-in-law passed 2/05/2015. estate created 5/6/2015. received 1099-C in 2016 for the amount of $8000

Accountant's Assistant: Is there anything else the Accountant should be aware of?

1099-C issued against decedent's SSN which is different from estate EIN. The estate appears to only have interest income of about $900.

Submitted: 1 year ago.Category: Tax
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Answered in 35 minutes by:
4/8/2017
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,122
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
Since the discharge was in 2016, report it on 1041. Let me check something, and I'll be right back.
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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
COD income created after the date of decedent's death may not be taxable to the estate. Unless the estate succeeded to the debt relief, you may not have to pay tax on this at all.Circumstances will dictate.Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer
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Customer reply replied 1 year ago
What do you mean by "Unless the estate succeeded to the debt relief..."?
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
If it was a debt of the estate that did not have to be paid, it's income to the estate.
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Customer reply replied 1 year ago
I guess I am getting hung up on the what is considered debt to the estate. This was my mother-in-law's debt which existed prior to the creation of the estate. Would that then be considered cancelled "debt of the estate"?
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
Then it is not taxable. I would argue it would be taxable to her if she was alive, but not the estate.1099c are issued in error a lot. Since this was issued a year late, and issued to her ssn, do nothing.
Customer
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Customer reply replied 1 year ago
Thanks.
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
You're welcome. Please take one more moment for positive feedback. Experts are only paid after feedback completes your request.
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