Tax - Is it possible to issue 1099 misc for damages?

3 Replies

In March of 2016 my renters moved out and skipped out on paying their damages above and beyond the deposit that I kept.  We had some ugly conversations and wasn't worth taking them to court over $1100 as I figured they wouldn't pay.  I have seen on here that people say they issue a 1099-mics for uncollected fees.  After reviewing the form, this doesn't seem right to issue the tenant this, as if its the wrong form.  What am I missing here? Can someone provide some insight?  I don't have an accountant.  I would like to hit them with paying taxes on it if possible.  Or the very least let them deal with the IRS when they don't include on their taxes.  I'm guessing I'm too late to get anything filed. 

@Jim Adrian

What they're talking about is 1099-C, not 1099-MISC. It is debatable whether you as an individual can issue this form. In my opinion - no. But some of my colleagues believe it's possible.

That said, having worked with investors for 20 years, one of the lessons I learned was - let things like this go. It's part of being in business, and it's not worth your time and mental energy. The $ damage is done, and you're only adding grief on top on that.

Agree with the “focus on something beneficial” suggestion. Also, the only way you could issue the 1099 is as “debt forgiveness” which means you’d have to get s Judgment first.

@Michael Plaks @Wayne Brooks

Thanks for your comments!  I will take a look at the 1099-c form.  I kind of figured it was a loss cause but wanted to learn what tools where out there.

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