Tag Archives: Cancellation of Debt
Did you know that the IRS considers any forgiven debt as a source of income and that taxes must be paid on that “revenue.” And if you’ve ever settled a debt for less or had debt forgiven completely, you’ve likely received a surprise in the mail coming tax season the Form 1099-C. A 1099-C reports […]
— Read moreSometimes, those you owe money to may consider the debt forgiven, and cancel the remaining balance. In these situations, you’ll likely still have to pay tax on the amount forgiven, as the IRS considers the balance to be a form of income. You’ll be responsible for paying income tax on the cancelled debt. Debt is […]
— Read moreDebt includes any incurred, whether personally liable or only to the limits of the property that secures the debt. Debts secured by property that are canceled, either in whole or in part, are typically the result of foreclosure, repossession, property abandonment, loan modification or voluntary surrender of the property. You will receive a Form 1099-C, […]
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