This is apparently yet another 1099C question :)
For my S-corp business, I had a line of credit with a bank that changed loan terms after three years into a fixed loan. This loan was backed by SBA. I was unable to pay the new terms (and didnt actually understand that it was going to change) and tried unsuccessfully to work it out with the bank to make payments, I defaulted on the loan. Ultimately, a court judgement against my company and me – transferred the full loan amount due to the SBA – where I have been making fixed monthly payments to pay off this debt. I understood to be ‘done’ with Chase.
Thanks so much for your help – I have received a 1099-C from Chase that apparently I now have to report as income for my business. I am receiving no offset for the amount I owe and I am fully paying my debt to the SBA. (which was what I was trying to arrange with Chase in the first place)
Is this an error I can dispute or am I on the hook for this amount as income – the amount of my loan due to the SBA is about 24K, the amount Chase is writing of is about 11K? SBA says there will no change in the amount of the loan due to them. I dont see how this can be assessed as income to me??
Please please help _ what ever the answer I have to fight this on my own – I have no ability to hire tax lawyers. I just dont know how these things work and maybe my acquiescence on the court judgement allows them to report this way.
If you are paying the amount back to the lender, than the 1099c appears to be in error. I would contact the lender to have them correct and remove the 1099c.
If they will not correct, I would attach a statement to your return notifying the IRS of the discrepancy.
Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.
If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.S Corp Line of Credit Backed by SBA Resulted in 1099-C From Chase. - Amanda by Jim Buttonnow