1099 C

Forum|Forum|1 year ago
February 7, 2025
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I just received a 1099C on a mobile home that was my primary home until 2012 when I had a traumatic accident and was unable to pay the mortgage and it was repossessed. I haven't heard anything for 13 years. I have already filed my taxes for the year and assume I will need to complete an amendment to include this cancellation of debt. The total amount was over 22k. The charge off date was 12/31/24. Should I be concerned this will incur a large tax liability?

SharonD007

It depends. You may end up with a tax liability because when a creditor cancels a debt, the IRS considers the canceled debt as income. Your canceled debt may be excluded from your income if you meet one of the exceptions, which are:

Debt discharged in Title 11 bankruptcy
Canceled debt on real business property and qualified farms
Forgiven debt on a qualified principal residence between January 1, 2007 - January 1, 2021
Debt canceled due to insolvency.

Refer to the TurboTax articles When to Use Tax Form 1099-C for Cancellation of Debt and Guide to Debt Cancellation and Your Taxes for more information.

If you can exclude your canceled debt, refer to TurboTax article How do I report excludable (non-taxable) canceled debt?

Don't amend your tax return until your tax return is fully processed, which means you have received your refund or if you have a balance due, it's deducted from your account. If your tax return is pending, don't make any changes.

For more information and instructions, review the TurboTax articles How to Correct Federal Tax Returns , How to File an Amended Tax Return with the IRS and Video: How to Amend Your Tax Return.

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