Taxpayer asks:
Hello, Taxgirl Hope you are doing well! I have a Question I got a 1099-c form from wells fargo for about 5000 will this be alot of added taxes for me and my wife we made about 71000 last year we have 1- 4 year old. I am scared to file my taxes! ugh what do you think? thanks
Taxgirl says:
Don’t be scared, it’s not that bad. In your tax bracket, for married filing jointly, that reportable income is going to be taxed at about 25%. Expect to pay an additional $1250 in tax for the 1099-C – not great but not horrible.
If there are special circumstances, such as insolvency, you may qualify for an exception. If you’re not sure, consult with your tax pro.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
We seem to be getting more of the 1099-C’s this year – at least as compared to last year and considering it is early in the season. Everyone we have seen so far has been excluded due to insolvency. One for bankruptcy. The insolvency, I think, is going to work wonders for the exclusion because of the decline in market value of homes. Just about everyone I know that has a mortgage of any size is upside down on their house now. And for those who have purchased new cars in the last year or so the insolvency is even greater. I considered trading my car a few weeks ago as the incentives are pretty good. The salesman was nice enough to tell me that although the incentives were good they would not make up for the beating I would take on the trade in price. No, none, nada, zip market for used Jags and as a result no trade in value. So I guess if I owed anything on the dumb car I would be upside down on it as the market value is practically non-existent. And speaking of insolvency – we have added a bankruptcy attorney to our phone list……that’s how many questions we have received regarding bankruptcy so far this year. But now that the stimulus package has passed consumers will immediately go out and spend their extra $10 a week and the economy will rebound pretty quickly – What? You mean it might not? But how can this be so? I have the word of the best politicians money can buy that this stimulus package is the answer to all things for all people.
Skip, I don’t doubt it. I’m receiving a lot of questions about forms 1099-C.
just to add to my 1099-c problem i called my lender today and asked them why i recived this 1099-c from on feb 27 2009 when i should have recived it by jan 31 2009 they had no answer. i also asked why i was got a 1099-c when there was nothing in my agreement that said i would be liable. they said it didnt matter that all losses are reported. but i must note that this bank was recently given BAILOUT BY THE GOVERMENT for mortage losses. i asked them why are they double dipping from tax payers because they are putting my home vaule loss as their loss and getting money from the irs and on top of that also getting bailout money for the same thing,. the rep transferd me to a supervisor who said the bank had no comment on my question. so my thing is im getting a 1009-c for 97,000 i did not use one penny for my own gain. and they want to charge 97,000 income i never made or saw a penny of so some rich ceo banker can get his multi million dollar bonus. thats not right.
hey tax girl I file my own returns every year but this year like has not been like any other. I got into a mess because of an arm loan on my mortgage. but I got out of it with a great loan modification . I’m in newyork I paid 389,000 for my home 4 years ago. the house value dropped below 280,000 I almost went into foreclosure cause my payment was going up because of the arm and I couldn’t afford it. I requested a loan mod they saw the situation and they decided 2 reduce my loan to 291,000. now nowhere in the new agreement that I singed did it say I was responsible for the 97,187 that they took off the principal it simply said my new debt was 291,000 no strings attached. now I’m receiving a 1099-c form that its a cancellation of debt for the amount of 97,187 what do I do I’m scared I have no money to pay the IRS. I could barely afford to keep the house but I do it because I have wife and disabled child . and we need this home but somehow I feel like the mortgage company is trying 2 stick it to me with this 1099-c . can you give me some advise I don’t know what to do. thks.
just to add to my 1099-c problem I called my lender today and asked them why I received this 1099-c from on Feb 27 2009 when I should have received it by Jan 31 2009 they had no answer. I also asked why I was got a 1099-c when there was nothing in my agreement that said I would be liable. they said it didn’t matter that all losses are reported. but I must note that this bank was recently given BAILOUT BY THE GOVERMENT for mortgage losses. I asked them why are they double dipping from tax payers because they are putting my home value loss as their loss and getting money from the IRS and on top of that also getting bailout money for the same thing,. the rep transferred me to a supervisor who said the bank had no comment on my question. so my thing is I’m getting a 1009-c for 97,000 I did not use one penny for my own gain. and they want to charge 97,000 income I never made or saw a penny of so some rich CEO banker can gets his multi million dollar bonus. that’s not right.
We have received a 1099-C from Wells Fargo that differs from our records. How do I argue that? Also, they continued to add late charge fees and interest through the negotiation process. At what point do they stop adding those to the account?
If a 1099-C is issued to a deceased person in the year AFTER his/her death, and it is in that person’s name alone, does it have to be answered? There is no other “income” to the decedent. Decedent died 2008, Form 1099-C issued for 2009 with debt canceled 12/31/2009. Debt of around $3600.
Credit card debt “Borrower was not personally liable for repayment of debt.”
My wife died 12-13-05. This year I received 2 1099 C saying her credit card debt was cancelled due to her death. The 1099 C was issued and dated on
11-2009.
How do I handled this tax problem. The credit card debt was entirely hers, in her name, social secruity # and so is the 1099 C. I have since remarried.
My husband died in 2004. I recently received a Misc 1099-c for a credit card debt that the bank cancelled. The Misc 1099-C was in his name and SS# only. It said estate after his name. I just received it this year for 2011. The card was applied for my him only. Do I have to do something. He had no estate. Everything was in my name only, home etc.
Our acountant received for year 2011 from Wells Fargo a 1099 form for interest earned of $5000-$6000. I can not find ANY information from Wells Fargo Bank regarding this account — They say the 20 digit acct number doesn’t exist. They’ve given me different depts to speak with and no one can find out any info. Both my divorced parents are deceased and I’ve given them both their ss#’s as well since I was the benefiaries for them. Do you have any suggestions of how I can get this information?