The 1099-C: Tax Consequences of Debt Negotiation

Of all of the surprises that can come within the mail for income tax period, one of the more dreaded is the 1099-C. The IRS classifies some forgiven debts as a revenue stream, and therefore qualified to receive fees. You must file these forgiven debts on your tax return as income related to the cancellation, settlement, or forgiveness of a previously existing debt when you receive this form. (more…)