Page 15 - Tax Information for Individuals - Handbook0

Cancelled Debt (3/3)

Is it taxable or not?

• After a debt is canceled, the creditor may
send you a Form 1099-C, Cancellation of
Debt showing the amount of
cancellation of debt and the date of
cancellation, among other things. If you

received a Form 1099-C showing
incorrect information, contact the
creditor to make corrections.

• For example, if the creditor is continuing
to try to collect the debt after sending
you a Form 1099-C, the creditor may not
have canceled the debt and, as a result,
you may not have income from a

canceled debt. You should verify with the
creditor your specific situation. Your
responsibility to report the taxable
amount of canceled debt as income on
your tax return for the year when the
See - https://www.irs.gov/taxtopics/tc431 cancellation occurs doesn't change
whether or not you receive a correct
Form 1099-C.

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