Do I need to file a Form 1099-C for a loan I made?

I loaned a friend some money. She made a few payments, then stopped. She signed a promissory note and I have made collection efforts, all documented. I want to take the short term capital loss (bad debt) on my 2007 taxes. Do I have to file a Form 1099-C with the IRS, or do only banks/mortgage companies have to file that form?

Do I need to file a Form 1099-C for a loan I made?
Since you're not in the business of loaning money, you don't have to file this form. However, if you want the IRS to know that she should be including this amount in her income for 2007, you could file it anyway. There's no rule that says you can't. It just depends on if you're still friends with her. You won't be if she gets 1099'd by you, that's for sure.
Reply:Only companies whose primary business is making loans, or who are otherwise engaged primarily in financing activities, are to file Form 1099-C.

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