Q: I received a 1099C for a car that I bought with my deceased ex-husband in 2004. They sent me one for the entire balance.

A: When you receive a 1099-C for a debt that was jointly held with a now-deceased individual, such as an ex-spouse, the situation can indeed become complex. Generally, the responsibility for the debt and the implications of the cancellation of debt income can vary based on several factors, including the laws of the state where you lived, the terms of your divorce decree, and how the debt was managed after the divorce.

If the debt was incurred jointly, and you were co-borrowers, the creditor may pursue the remaining party for the full amount upon the death of the other. However, for tax purposes, the amount reported on the 1099-C should ideally reflect your share of the debt responsibility as determined by applicable state law and your divorce agreement.

Given that you were divorced at the time of your ex-husband's death, it would be reasonable to expect that any financial obligations would be divided according to the terms set forth in your divorce decree or under state law. If the entire balance was reported under your name, this could be an error or an oversight by the creditor.

You should consult with a tax professional or an attorney to review the specific details of your case. They can provide guidance on how to address this with the IRS, possibly including filing a dispute if the reported amount does not accurately reflect your liability for the debt. They can also advise on whether an amended 1099-C should be requested from the creditor to accurately represent your portion of the cancelled debt.

Addressing this issue promptly is crucial to ensuring that your tax obligations are accurately reported and to minimize potential legal and financial complications.