1099C after TP paid 3rd party settlement co

[schirallicpa]

The 3rd party settlement co (123 something or other) took his money and never paid bank of america!  He paid the 3rd party 39K between 2015 and 2017,  closing it - or so he thought - in 2017.  In 2019 he received the 1099C.   How's that for a mess.

 

 

[Catherine]

Yikes!

[Sara EA]

This is the type of mess that usually comes around in the summer--situations you never could have imagined.  The problem is that this summer is still normal tax season, but these impossible dilemmas are still sticking to their usual schedule.  In your situation, the bank may be the culprit here.  The same bank had a lien on our home that we didn't know about until we were selling.  They didn't know about it either, and we never even had a loan with them and owned our home outright.  It took three weeks of daily phone calls and a threat to involve the state banking commissioner until they resolved it.  Ever since we have dubbed it "the Worst Bank in America."

[Catherine]

21 hours ago, Sara EA said:

a threat to involve the state banking commissioner

Magic words! I had an insurance problem (decades ago) that was completely unsolvable until I spoke the miracle phrase "I will call the insurance commission" at which point resolving the problem became trivial and immediate.  I have *never* forgotten that.

[Abby Normal]

On 6/26/2020 at 1:44 PM, schirallicpa said:

2017.  In 2019 he received the 1099C

1099C's are almost always issued in a following year from when the debt actually became uncollectible. The IRS knows this. Did you report the cancellation of debt income in 2017? If not, show it now and then subtract the amount paid.