Question

How do I handle a 1099 sent to my S Corporation after my "Personal" Chapter 7 Bankruptcy?

Forum|Forum|6 years ago
March 4, 2020
1 reply
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Two questions:

I personally filed and was approved for Ch. 7 Bankruptcy protection in 2019. I received the approval and because of the debt that I was paying on a company credit card was dissolved in that bankruptcy, the Credit Card company issued a 1099 in my S-Corporation's name. The company had $0 income in 2019 and showed a loss over the last few years. It has 0 assets for distribution.

Note: The S-Corp "DID NOT" file for Bankruptcy protection.

How do I handle this on my personal return or S-Corp return? If on the S-Corp, , what form to file along with my 1120s.

Does this constitute income carried over to my K-1?

Finally,

I am actively closing the S-Corp down and haven't yet filed my 2019 return but I checked the box indicating this is my last return. Am I supposed to wait to file this return and ask for an extension so I can properly file Form 531 with the State and Form 966 with my Final Federal return.

TurboTax Business Windows

D

DianeC958

Since you have not filed your final return for your S-Corp the 1099-C needs to be reported as income for the business. If you have any expenses for the S-Corp you can add the expenses.

Yes, this does constitute income and is carried over to your

K-1 from the S-Corp and will need to be reported on your personal tax return.

There is not a form you need to file with your business return you just claim the amount on the 1099-C as income.

The Form 531 for Michigan is not filed with your tax return. This is a form you fill out and send to Michigan by itself.

The Form 966 does not need to be filled out since you are an S-Corp. By filing your final return with the IRS that will close out your business entity with them.

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