How to report 1099-C and 1099-R Help??
I have two questions for anyone that can help me out. And as always your help is appreciated. I'll start with the 1099-C
1099-C Cancelation of Debt. This was for student loans. The student loan corp for my state, and all states from what I have found, are forgiving $2500 on student loans for military members on active duty from Sept 11, 2001 until July of 2008. The IRS Pub 525 is very unclear, it states something to the effect that you do not have to report the cancellation if it were for job related duties or for a broad range of employers. Since this was specifically for military service, which is a specific job. I do not think this would be reportable as income.
The next form, 1099-R, I received my TSP (gov version of 401k) after leaving the civil service. I am not over the retirement age. OK so this income is subject to a 10% early withdrawl fee except for certain things. On the list of exceptions, #9 is for the purpose of buying a first house. Which I did but the TSP guys didnt know that. They didn't know because on the form to request a withdrawl it does not state why you want to withdraw, just where you want the money sent. On the 1099-R my code for withdrawal is a 1 (early withdrawl, unknown why) It should be 2 (early withdrawl, with exception). Is there a way to get this changed?? Since I did use my withdrawl to help with a house purchase, I should be exempt from the 10% penalty, I think anyway. My house was purchased within about 2 months of my receiving the early withdrawal.
If anyone has any thoughts on weather the two above forms should be reported as income or with the penalty I would greatly apprecitate your help. It could mean the difference in my paying a small amount to well over a thousand.
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Feb 19th, 2008, 02:42 PM
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