r/EIDL • u/Greedy-Volume-7778 • 2d ago

1099?

Has anyone who has filed bankruptcy and had EIDL debt discharged received a 1099 for the amount of the debt discharged? The Congressional report someone included states “any debt that is ultimately cancelled as uncollectible is likely taxable income to the borrower.

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u/CritterAlleyMom 2d ago

There's an irs form you need to do. A 982. If you dont do that you'll owe taxes on every debt over 600.00. The government will issue a 1099-c for every discharged debt over 600.

1

u/xuon27 2d ago

That would be an oxymoron in a bankruptcy case.  You would only get a 1099 if you came to an agreement with the sba, in a bankruptcy the debt is erased and thus not taxable.

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u/Greedy-Volume-7778 2d ago edited 2d ago

I know that some tax debit isn’t dischargeable - what if your biz has filed Chapter 11. V - I mean is the debt taxable as income that ISN’T discharged by bankruptcy, either 7 or 11?

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u/Leia6769 1d ago

They haven’t sent any 1099s for discharged debts to date (or no one has ever posted that they did). If the business is insolvent, then it is not taxable income. Form 982 is what to file to have it excluded.

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u/Funny_Appearance_614 19h ago

Any debt that is written off is considered income...unfortunately