Forgiveness of debt

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My son in law passed away last year. His employer, issued a 1099-Misc for a loan they had granted him as part of his employment, for which he did not need to pay back upon death. When he died they construed the debt as income fully earned & issued the 1099-Misc to my daughter. I was expecting a 1099-C assuming it would be forgiveness of debt.

Do you see any basis for classifying this as forgiveness of debt (which would be more favorable due to the insolvency exclusion) versus other income? Being it is a 1099 Misc I received, if I do this, I would think the IRS would kick it out as being misclassified. When I read the agreement on this, I found it somewhat confusing whereby it could be interpreted either way (forgiveness of debt or earnings). Any other thoughts you have would also would be greatly appreciated.
 

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