Where you report your 1099-C depends on who the 1099-C was issued to. You stated it was received for your business, but does it have the EIN of the business or your social security number under the box labeled Debtor's TIN ?
In addition, what kind of business do you have? If you have a s-corporation and you use the accrual basis, you would file this as income under the s corporation. This will flow through to your personal income tax return through your K-1.
If you operate a business as a sole proprietor and you’re using the cash method of accounting, you technically did not deduct expenses paid with the debt. Therefore, you don’t have to report it on your tax return. However, once the debt is canceled you can’t include the expenses it covers in your deductions on Schedule C, which can ultimately increase your taxable net profit.
For more information, please see Guide to Debt Cancellation and Your Taxes.
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