Question:
Dear Steve,
My ex and I took out a HELOC before the divorce.
She quit claimed the home to me. I recently settled w HELOC, and the balance of the debt was forgiven.
My ex and I both received 1099-c forms. My debt was discharged through a chapter 7 bankruptcy.
My ex never claimed bankruptcy. Do we both have to include 1099-c income when filing taxes?
I am confident my 1099-c income will be exempt due to bankruptcy, but what about my ex?
She may qualify due to being insolvent, but curious what implications for her are if I claim the full amount and am exempt from my bankruptcy.
Jeffrey
Answer:
Dear Jeffrey,
It can certainly be confusing. But you should read this previous answer for some guidance.
If your ex was insolvent in that tax year, then IRS Form 982 could help her quickly deal with this.
The underlying issue was that even though she transferred her ownership of the property to you through a quitclaim deed, it did not alter her relationship with the lender for the loan.
I don’t think there is any better place for your ex to get specific advice about this situation than to talk to an experienced tax professional for guidance.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
- Who Knew TitleMax Sucked This Bad? - February 23, 2023
- Litigation Practice Group Lawsuit by Business Partner All Service Financial – We Want Our Money - January 24, 2023
- HomeAdvisor and Angi to Pay Up To $7.2 Million and Stop Deceptively Marketing its Leads for Home Improvement Projects - January 23, 2023
Asked question about 1099-C with the ex.
Answered.