If you receive a 1099-C, it means that your debt has been canceled or forgiven. This could happen for a variety of reasons, such as bankruptcy, foreclosure, or a settlement with a creditor.
When you receive a 1099-C, you need to report it to the IRS on your tax return. The amount of the debt that was canceled or forgiven is considered taxable income. However, there are some exceptions to this rule. For example, you may not have to pay taxes on the debt if it was canceled due to bankruptcy or insolvency.
If you're not sure how to report a 1099-C on your tax return, you should consult with a tax advisor.
Here are some additional things to keep in mind if you receive a 1099-C:
You should keep a copy of the 1099-C for your records.
You may need to file a Form 982 with your tax return if the amount of debt that was canceled or forgiven is more than $600.
You may be able to deduct any expenses that you incurred in connection with the cancellation of the debt.
If you have any questions about how to handle a 1099-C, you should contact the IRS or a tax advisor.
💡Your creditor will provide your 1099-C directly to you; Relief cannot provide this.