Form 1099-C, Cancellation of Debt

Form 1099-C, Cancellation of Debt

• Taxpayers could receive Form 1099-C if they had any debt cancelled in excess of $600 (may receive Form 1099-A if a property).
• In a typical year with no extensions, Form 1099-C must be issued to taxpayers no later than January 31st.
• Taxpayers who are not insolvent and whose debt is not in relation to a Title 11 bankruptcy MUST include the debt as income on their 1040.
• Taxpayers who are insolvent or whose debt is related to a Title 11 bankruptcy may be able to exclude the debt from income using Form 982. For more information reference What is Insolvency? and Form 982. 

Follow the instructions below to correctly enter the Form 1099-C (taxpayers who do not qualify to utilize Form 982):

1. Select Add Form.

2. Begin by typing 1099-C, into the search bar at the bottom of the All Forms and Schedules Menu.

3. Select Form 1099-C. Double-click to add the form.

4. If a joint return, choose New Taxpayer's or New Spouse's Occurrence.

5. Complete the 1099-C, filling in all applicable sections. 

6. Select To Form: in box 2.

7. Select Choices from the Active Options Window.

8. Choose 1040 Other Income.