Q: I just received (February 2024 for 2023 tax year) a 1099c for a defaulted auto loan forgiven in 2007 in California.
Is there no statute of limitations on this debt? Must I claim the $7507 as income when I file my taxes?
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- California
- (916) 704-3009
- View Profile
- Answered
A:
No, you do not have to claim the $7,507 as income from the 1099-C you recently received for this very old auto loan debt. There is a federal statute of limitations that should prevent this forgiven debt from being treated as taxable income over 15 years later.
Specifically, under 26 U.S. Code § 6050P, there is a statutory time limit that information returns related to cancellation of indebtedness, including 1099-Cs, must be filed and furnished to individuals no later than the filing deadline (including extensions) for the year of the actual debt discharge.
Since you state this auto loan debt was defaulted and forgiven way back in 2007, the creditor failed to meet this statutory timeline by waiting until 2024 to send you the 1099-C.
As such, you have strong grounds not to claim the discharged debt amount as income when you file your 2023 taxes this year. The 1099-C was furnished to you well outside the federal limitation period that expired back in 2008 (assuming the creditor's tax filing deadline with extensions).
I would consult with a tax professional for an opinion, but based on these limitation rules, you should be in a good position legally to disregard this very late 1099-C reporting old forgiven debt that has long passed the mandated reporting timeframe.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
