If you defaulted on a debt, negotiated a reduced pay-off with your lender, or lost a home or other property due to foreclosure or repossession, you may have received a Form 1099-C Cancellation of Debt in the mail. Since the IRS expects you to include in your gross income any forgiven debt—and pay taxes on it (unless you qualify for an exclusion or exception)—this is a form that requires your careful attention.
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If you have received one of these forms, you’re not alone. The IRS projects that it will process 2.8 million 1099-Cs for the 2010 tax year, up from nearly 2.7 million for the 2009 tax year. Thus, this week’s infographic is dedicated to the Form 1099-C, the new tax-time mascot of the Great Recession.
For more on the Form 1099-C, see Gerri Detweiler’s article, 1099-C In the Mail? How to Avoid Taxes on Canceled Debt.
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Are you being harassed by debt collectors? Check out Eleven Ways A Debt Collector May Be Breaking the Law.
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My understanding is that if a tax payingdoes the tax law regarding insolvency being a reason not to be taxed on forgiven debt also expire this year?
My husband (73) received a 1099 C in the mail . this is on a student loan dating back to 1990 or about that but was forgiven last year because of health reason and not having any income to paid it with other than small social security of 12,000.00 per year. Does he have to file taxes on this since he has not filed taxes in over 4 years.
I received a 1099 c from Chase as I was granted a deed in lieu from cancellation of mortgage debt. On form 982 part 1 option E, part 2 option 10 B…Would I need to fill out part 3? If so please provide direction??
Thanks!
I am so angry about this fraudulent use by pond scum zombie debt collectors in our case Asset Acceptance is back at their scams again and I received one in the mail today that is totally bogus!! It has all my personal info (ssn etc) and an alleged debt that is invalid that I already fought off with another pond scum zombie (mrc receivables) years ago in court and I won the court case!! How do we fight this injustice??? I am at this moment going on 15 minutes hold time with the IRS for my first point of contact to ask questions and tell them about this, my next step is filing a complaint with the consumer protection bureau and ftc I refuse to have to pay for something I am not liable for per my court case back in 2006 now 7 years later these scam artists ASSET ACCEPTANCE are causing problems I hope it can get resolved with them having to pay fines thats for sure. grrrrrrrrr!