turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

I got a 1099-c for a personal loan. Does that mean I don’t have to pay it back? Or I only have to pay back the settlement amount, if anything? Does it affect taxes?

I received it for a loan that was supposed to be settled. The settlement company says it’s not settled on their end but I got a 1099c for it. They can’t tell me that if there is a settlement, do I need to pay back the settlement amount, or do I not need to pay it at all? If there is a settlement, and it’s not paid, what could happen? How does it affect my taxes? I’m so confused
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies

I got a 1099-c for a personal loan. Does that mean I don’t have to pay it back? Or I only have to pay back the settlement amount, if anything? Does it affect taxes?

whether the settlement company can still go after you for the unpaid amount is a legal question, not an income tax question. consult a lawyer. however, that form represents income  - forgiveness of debt - that needs to be included on your income tax return.

 

in 2016, an IRS rule allowed debt collectors to file a 1099-C after 36 months of no payment.

JohnB5677
Expert Alumni

I got a 1099-c for a personal loan. Does that mean I don’t have to pay it back? Or I only have to pay back the settlement amount, if anything? Does it affect taxes?

As @Mike9241 stated above, We do not address legal issues,  However, a 1099-C may represent a taxable income.

 

The 1099-C is forgiveness of debt, and it can increase your taxes.

The procedure below is not for home foreclosure forgiveness of dept like credit card debt.

 

To post a 1099-C

  1. Log into TurboTax
  2. Go to Wages & Income
  3. Scroll to Less Common Income
  4. Select Miscellaneous Income, 1099-A, 1099-C
  5. Scroll down to Other reportable income
  6. Any Other Taxable Income? Yes
  7. Enter the value on the 1099-C

If I've misunderstood your question, and this does not completely answer it, please contact us again and provide some additional details.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies