Question

1099-C for my business?

Forum|Forum|5 years ago
February 9, 2021
2 replies
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I received a 1099-C for my business. Debt description "Loans provided to Small Businesses in response to COVID-19"

Box 5 is checked, does this mean I need to file with my personal taxes? If so, will it count against me?

TurboTax Business Windows

Where you report your 1099-C depends on who the 1099-C was issued to. You stated it was received for your business, but does it have the EIN of the business or your social security number under the box labeled Debtor's TIN ?

In addition, what kind of business do you have? If you have a s-corporation and you use the accrual basis, you would file this as income under the s corporation. This will flow through to your personal income tax return through your K-1.

If you operate a business as a sole proprietor and you’re using the cash method of accounting, you technically did not deduct expenses paid with the debt. Therefore, you don’t have to report it on your tax return. However, once the debt is canceled you can’t include the expenses it covers in your deductions on Schedule C, which can ultimately increase your taxable net profit.

For more information, please see Guide to Debt Cancellation and Your Taxes.

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K

kosmoboy1965Author

The Debtor's box info is the last four digits of my EIN, and the document is addressed specifically to my business, which is a S-Corp in the State of Washington.

A

AmeliesUncle

What program or reason was the forgiven?

Some lenders have erroneously sent out 1099-Cs when they should not have, such as for forgiven loans under the Paycheck Protection Program (PPP).