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?

[aashleyy1997]

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

[Mike9241]

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]

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

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