The Short Answer

Possibly—but not simply because the estate is “assetless.” A Form 1099-C generally signals that a creditor is reporting canceled debt to the IRS, and canceled debt can be treated as taxable income depending on who the borrower was (the decedent personally vs. the estate) and whether any federal exclusions apply.

Even when there are no probate assets, the tax reporting and liability questions can be complicated, and mistakes can create avoidable IRS issues for the personal representative.

What Florida Law Says

Florida probate law focuses on identifying the decedent’s assets and debts, administering the estate, and ensuring required taxes are addressed before the estate is closed. While a 1099-C is a federal tax document (and the income-tax treatment is primarily governed by federal law), Florida law still matters because it governs the personal representative’s duties and the court’s ability to close the estate when tax issues remain.

The Statute

The primary Florida law that often becomes relevant when tax issues affect closing an estate is Fla. Stat. § 198.26.

This statute establishes that a Florida court generally should not allow a personal representative’s final accounting unless the required tax has been addressed (or the estate is shown to be nonliable under the statute’s framework).

Why You Should Speak with an Attorney

While the statute provides the general rule, applying it to your specific situation is rarely simple. Legal outcomes often depend on:

• Strict Deadlines: Estates often cannot be wrapped up cleanly if tax questions are unresolved, and delays can create additional administrative and court-related problems.
• Burden of Proof: If a 1099-C was issued, you may need to determine whether the canceled debt is properly attributable to the decedent, the estate, or someone else, and whether an exclusion applies—issues that can require careful documentation and legal analysis.
• Exceptions: Whether canceled debt is taxable can turn on nuanced exceptions and factual details (for example, the nature of the debt, who was legally liable, and the timing of the cancellation relative to death and estate administration).

Trying to handle this alone can lead to procedural errors, incorrect tax reporting, or unnecessary disputes with creditors or the IRS—especially where there are no assets and you’re trying to confirm that nothing is owed and the matter can be closed.

Get Connected with a Florida Attorney

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Disclaimer: This article provides general information under Florida law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.