TWO 1099C FOR SAME CANCELLED DEBT?

[KATHERINE]

Hi dear friends here,

I have question:  the business owner used personal guarantee to get a loan liable by his company.  The debt got cancelled by bank.   The bank issue 1099C to both the company and the business owner.   I  think it is duplicated and request the bank to remove the one issue to the business owner.  They refused.   

How should I handle this?

Thank you!
 

Kate

 

[kathyc2]

The bank handled it correctly. See if Pub 4681 answers your questions for your particular circumstance.

[KATHERINE]

 I  went 1099C instruction, it said 

 

so, I think I will check with bank again.   It is so confusing.  

 

Thank you, Kathy!

[kathyc2]

Are you sure the loan docs have it as guarantor instead of co-signer?

[Lee B]

Report both 1099Cs then back out one of them with the explanation, " Reported on Form xxxx Ein xx- xxxxxxx.

Don't spend any more time wrestling with the bank, you will just get dirty.

[KATHERINE]

27 minutes ago, cbslee said:

Report both 1099Cs then back out one of them with the explanation, " Reported on Form xxxx Ein xx- xxxxxxx.

Don't spend any more time wrestling with the bank, you will just get dirty.

Hi Kathy, he was taking personal guarantee but he is not the borrower itself.  If I accept both 1099C, then the IRS will count other income twice; otherwise, how should I offset it, report as nominee?  

[kathyc2]

If it make the most sense to report it on Corp return, then I'd put it on 1040 Sch1 line 8c and also negative amount with short explanation on line 8z

I'm assuming you checked if there is any exclusion due to insolvency?

 

[Lee B]

Katherine, since you haven't said what kind of entity is the business, it's a bit unclear?