Most Asked Questions
What Is A 1099-C And Why Did I Receive This?
When you make a settlement with a credit card company, the amount of forgiven or cancelled debt is considered income and is reported to the IRS. A 1099-C, or cancellation of debt tax notice, reports the amount of money you need to include on your tax return. For example, if you settle $50,000 in debt with your credit card company you might still owe the IRS $20,000 in taxes - and the IRS is not as forgiving as the credit card companies. *There is an exception for mortgage debt cancelled on your primary residence as this cancelled debt is not considered income.
Note If you need professional help with "Most Asked Questions" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.