IRS FORM
Form 1099-C
Cancellation of Debt
Cancellation of Debt
A 1099-C, “Cancellation of Debt”, is a form used in the United States to report the cancellation of debt. When a financial institution or creditor forgives or cancels a debt you owe, it’s generally considered taxable income by the Internal Revenue Service (IRS), unless certain exclusions apply. This form is part of the 1099 series, which are used to report various types of income that individuals may receive throughout the year other than salary from an employer. It is an essential document for tax reporting purposes, ensuring that information is correctly reported to the IRS.
Per the IRS, file Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if:
- You are an applicable financial entity.
- An identifiable event has occurred.