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Hello,
I am doing my mother-in-law's taxes. My father-in-law passed away in Sept. 2011. I did his final tax return last year for 2011 with writing deceased on the top of the return and mailing it in.
My mother-in-law received a 1099-C for cancellation of debt from the US Dept. of Education for my father-in-law (he went back to college). Only his name is on it; my mother-in-law was never listed as part of the student loan.
My question is, how does this work since I've done the final tax return for my father-in-law, and was a joint return? I know I don't want to include it on my mother-in-law's return because she has no part in her husband's schooling. There is no ongoing estate to take care of as he didn't have anything. Do I just ignore this? Not like they can fine a dead person.
Thank you.
I am doing my mother-in-law's taxes. My father-in-law passed away in Sept. 2011. I did his final tax return last year for 2011 with writing deceased on the top of the return and mailing it in.
My mother-in-law received a 1099-C for cancellation of debt from the US Dept. of Education for my father-in-law (he went back to college). Only his name is on it; my mother-in-law was never listed as part of the student loan.
My question is, how does this work since I've done the final tax return for my father-in-law, and was a joint return? I know I don't want to include it on my mother-in-law's return because she has no part in her husband's schooling. There is no ongoing estate to take care of as he didn't have anything. Do I just ignore this? Not like they can fine a dead person.
Thank you.
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Tax Professional Answers
Randy Tarpey
A 1041 filing for your father in law would report the 1099-C form and then exclude it on Form 982. If you don't do anything the IRS may assess a tax on a CP 2000 Notice in which case you would send the Form 982 with insolvency exclusion and form 1041 with the IRS CP 2000 form to the IRS as a response.
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