Question

Why does a 1099-C counts as income when we had to refinance our loan due to COVID and they put the amount of the missed mortgage payments at the end of our loan

Forum|Forum|5 years ago
April 11, 2021
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According to the IRS, nearly any debt you owe that is canceled, forgiven or discharged becomes taxable income to you. You'll receive a Form 1099-C, "Cancellation of Debt," from the lender that forgave the debt.

If those missed mortgage payments were added to your refinance and you will be paying those payments are part of your mortgage, then you can contact the financial institution and ask the 1099-C be revoked. But if the payments were just documented on your refinance and you are not paying them back, then they were forgiven and became taxable income to you.