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1098, 5498, and W-2G” provided by the Internal Revenue Service
for 1995. A Form 1099-A is intended to be used only as
notification of the acquisition of an interest in secured
property in full or partial satisfaction of debt, or of the
abandonment of secured property; it is not meant to necessarily
imply that the debtor received DOI income. The form designed to
be used in the case of DOI is Form 1099-C, Cancellation of Debt.
If both forms apply, only Form 1099-C need be filed. In this
case, after petitioner received the Form 1099-A, he continued to
attempt to make payments on the debt. Furthermore, petitioner
was not released from all further claims by Associates until he
made a final $1,000 payment the following year. We find that,
contrary to respondent’s determination, the debt was not
discharged until 1996.
Finally, we find that petitioner recognized only $5,006 in
DOI income, rather than $6,005 as determined by respondent. The
Bobcat, with a fair market value of $12,575, was obtained by
Associates in 1995, and petitioner paid Associates $1,000 in
1996. Therefore, petitioner transferred $13,575 in cash and
property to Associates in exchange for the discharge of $18,581
of indebtedness.
The second issue for decision is whether petitioner has
properly substantiated various items on his Federal income tax
returns for the years in issue.
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