Mosby
Level 2
07-26-2021
09:14 AM
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I have a client who reported 1099C taxable income on 2020 tax return. He has paid off all the debt in 2021. How do I report this repayment?
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BobKamman
Level 15
07-26-2021
09:28 AM
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Was there a code in Box 6 of the 1099-C?
If the 1099-C was issued in error -- that is, the debt had not become legally uncollectible -- then file an amended 2020 return.
If the payment was made for moral and ethical, not legal reasons, then it probably doesn't require filing a gift tax return. But if you called IRS and asked three times, you would probably get three different answers.
