Form 1099 -C

Canceled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception, defined below.

To enter your 1099-C:

1. Open or continue your return, if it isn't already open.
2. From the upper right menu, select and search for 1099-C or 1099C (lower-case also works).
3. Select the Jump to link at the top of the search results.
4. On the Tell us about your canceled debt screen, select Yes.
5. Select the type of canceled debt (main home or other) and then select Continue.
6. Follow the instructions to enter info from your 1099-C.

Exclusions

• Debt canceled in a Title 11 bankruptcy
• Debt canceled during insolvency (the amount exceeding your assets)
• Cancelation of qualified farm or real property indebtedness
• Cancelation of qualified principal residence indebtedness, better known as mortgage debt relief

Exceptions

• Certain qualified student loans
• Money excluded from income by law, such as gifts or bequests
• Canceled debt that if paid by a cash-basis taxpayer would otherwise be deductible
• A qualified purchase price reduction given by a seller
• Any Pay-for-Performance Success Payments that reduce the principal balance of your mortgage under the Home Affordable Modification Program

To determine which apply to you, we recommend you consult a tax professional or see IRS publications 4681 or 544.