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1099-MISC does not convert income into nontaxable income.
Rinehart v. Commissioner, T.C. Memo. 2002-71 (citing Vaughan v.
Commissioner, T.C. Memo. 1992-317, affd. without published
opinion 15 F.3d 1095 (9th Cir. 1993)). MLIC’s issuance and
filing of the Form 1099-MISC with respect to petitioner's
benefits is evidence of its intention to cancel his debt.
Petitioner has not presented any evidence to indicate that the
Form 1099 did not represent DOI income.
MLIC prepared a Form 1099-MISC reporting that it canceled
petitioner's indebtedness and $22,905 as the amount of debt
canceled. Petitioner presented MLIC records indicating, among
other items, the date and amount of each payment to or for
petitioner's benefit that contributed to the amount of
indebtedness discharged in 1998. Accordingly, the Court holds
that petitioner realized and failed to report discharge of
indebtedness income in 1998.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011