My Wife and I Got Multiple 1099-C Forms for the Same Debt


Dear Steve,

Ran through a rough patch a few years back. Three vehicles were voluntarily surrendered for repossession. My wife and I jointly owned all vehicles as borrower and co-borrower.

My wife and I both received three (3) 1099-c forms for those three repossessions. I received three; she received three. Each vehicle’s canceled debt is the same on each 1099-c. How do I report that on my 1040?

Do I add them to me under the canceled debt, or do I have to add the same amounts to my wives? If I add both, then the amount owed doubles. How can they expect both of us the claim the same debt?



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Dear Brian,

It is a confusing situation when you receive what appear to be duplicate forms for the same debt.

The IRS says, “If you and another person were jointly and severally liable for a canceled debt, each of you may get a Form 1099-C showing the entire amount of the canceled debt. However, you may not have to report that entire amount as income. The amount, if any, you must report depends on all the facts and circumstances, including:

  • State law,
  • The amount of debt proceeds each person received,
  • How much of any interest deduction from the debt was claimed by each person,
  • How much of the basis of any co-owned property bought with the debt proceeds was allocated to each co-owner, and
  • Whether the canceled debt qualifies for any of the exceptions or exclusions described in this publication. – Source

If you file a joint tax return it should not make a difference on your return. According to Intuit, you would report one of each of the duplicate 1099-C forms but report both names on the 1099-C included. – Source

If you are married but filing separately then the IRS provides an example of how to handle that.

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Example 3—joint debt and separate returns. In 2020, James and his wife Robin were released from their obligation to pay a debt of $10,000 for which they were jointly and severally liable. None of the exceptions to the general rule that canceled debt is included in income apply. They incurred the debt (originally $12,000) to finance James’s purchase of a $9,000 motorcycle and Robin’s purchase of a laptop computer and software for personal use for $3,000. They each received a 2020 Form 1099-C from the bank showing the entire canceled debt of $10,000 in box 2. Based on the use of the loan proceeds, they agreed that James was responsible for 75% of the debt and Robin was responsible for the remaining 25%. Therefore, James’s share of the debt is $7,500 (75% of $10,000), and Robin’s share is $2,500 (25% of $10,000). By completing the Insolvency Worksheet, James determines that, immediately before the cancellation of the debt, he was insolvent to the extent of $5,000 ($15,000 total liabilities minus $10,000 FMV of his total assets). He can exclude $5,000 of his $7,500 canceled debt. Robin completes a separate insolvency worksheet and determines she was insolvent to the extent of $4,000 ($9,000 total liabilities minus $5,000 FMV of her total assets). She can exclude her entire canceled debt of $2,500. When completing his separate tax return, James checks the box on line 1b of Form 982 and enters $5,000 on line 2. He completes Part II to reduce his tax attributes as explained under Reduction of Tax Attributes, later. He must include the remaining $2,500 (his $7,500 share of the canceled debt minus the $5,000 extent to which he was insolvent) of canceled debt on Schedule 1 (Form 1040), line 8 (unless another exclusion applies). When completing her return, Robin checks the box on line 1b of Form 982 and enters $2,500 on line 2. She completes Part II to reduce her tax attributes as explained under Reduction of Tax Attributes, later. She doesn’t include any of the canceled debt on Schedule 1 (Form 1040), line 8. None of the canceled debt has to be included in her income.” – Source

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Damon Day - Pro Debt Coach

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