I'm in this same situation. We worked for all of 2019 to get out of a timeshare with Diamond Resorts based on the false promises, misleading information and pressure in the their sales presentations (which are required attendance). The notified us on 12/31/2019 that our timeshare was being cancelled for nonpayment. We still owed $28,000+ on the 3rd "update" we had signed up for. We then received a 1099-C for Cancelled Debt. I talked with the company with whom we had been working, who cannot give any legal advice but IRS Form 982 is our best friend. I talked to a trust lawyer friend, assuming she might have had to deal with this issue in her trust work, but she had not and new no one to whom she could refer me. I talked to a tax preparer who had also never confronted this issue but agreed she couldn't see how this could be income. She also checked with some others who also "mentioned" Form 982. I have read the previous answer to this same question but I don't see how I have gotten anything for what has been cancelled. We have paid with our previous payments the previous uses of the timeshare. With the cancellation of this debt we cannot continue using the privileges of the timeshare so we have not received anything for that money. I was also told by the company with whom we were working that DRI doesn't usually issue a 1099-C but it has happened on other occasions. It just does not seem to me that we have received anything at all from the amount cancelled. It would have covered continued use of the timeshare going forward. We have already paid thousands of dollar of both principal in the years we have owned the timeshare for the privilege of using it during that period. The cancellation notice from DRI even says that with the cancellation we no longer have access to any of the benefits of the timeshare. Those (future) benefits are what this would have paid for and we will not receive anything for that. Thank you.
