[WSBAPT] 1099-C Cancellation of Debt

[Jade Coppieters]

If the creditor’s claim was not properly presented/filed, I would argue there is no debt from which income can result when it was “cancelled”. It’s hard to say it was even “cancelled”, since Wells Fargo simply failed to preserve their claim by not following the probate claims procedure. If the Estate was not obligated to pay the debt, how can it owe income when the debt is cancelled?

I would ignore the 1099. Wells Fargo likely filed it with the IRS, which is frustrating as I suppose it could lead to questions from the IRS when no 1041 is filed.

J. M. Coppieters, Esq.
Phone: 206-236-1500
Fax: 206-905-5912

[cid:image002.gif at 01D93003.58FA63E0]<http://www.scarfflaw.com/>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Inge Fordham
Sent: Tuesday, January 24, 2023 2:12 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Subject: Re: [WSBAPT] 1099-C Cancellation of Debt

I have a similar situation.  Please reply to the list.

Thank you!

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Inge A. Fordham | Attorney
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From: <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of Brent Williams-Ruth <brent at williams-ruthlaw.com<mailto:brent at williams-ruthlaw.com>>
Reply-To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>
Date: Tuesday, January 24, 2023 at 2:11 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>
Subject: [WSBAPT] 1099-C Cancellation of Debt

Mighty Brain Trust -

Today I received a 1099-C for the cancellation of debt from a Wells Fargo credit card.

This debt was never presented as a creditor claim. The amount is $627.47.

The estate closed under regular process - Decl of Completion - on January 20, 2022. The creditor period expired on August 14, 2021.

Other than providing this information to the former Executor - I am open to guidance as to how to respond. It was reported as discharged on July 2, 2022. More than a year and a half after death.

Thank you.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

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