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I received a 1099-C for a student loan made from a lender while I was in college. They cancelled the debt. Do I have to include it as income?

Forum|Forum|7 years ago
June 1, 2019
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Box 5 is checked and Box 6 says G in it.

TurboTax Deluxe Online

Best answer by BillM223

Generally, yes.

The reason is that you received the use of the money years ago on the expectation that you would pay it back.

When the lender decided to discontinue collections, then the amount forgiven became taxable income to you.

Note that if you are insolvent on the date the loan was cancelled, then you can avoid being taxed on the cancelled debt. Go to Federal Taxes->Wages & Income->Less Common Income and click on "Miscellaneous Income, 1099-A, 1099-C" to do the interview on your 1099-C.

B

BillM223Answer

Generally, yes.

The reason is that you received the use of the money years ago on the expectation that you would pay it back.

When the lender decided to discontinue collections, then the amount forgiven became taxable income to you.

Note that if you are insolvent on the date the loan was cancelled, then you can avoid being taxed on the cancelled debt. Go to Federal Taxes->Wages & Income->Less Common Income and click on "Miscellaneous Income, 1099-A, 1099-C" to do the interview on your 1099-C.

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