Yes, you have to file a 1099-C if you received one. (The IRS gets a copy of the form and will sooner or later send you a letter to collect tax due (if any), penalties and interest. You don't want this.) Code G states that the 1099-C was issued because of a "decision or policy to discontinue collection."
To
enter your 1099-C,
- In your open Federal Return, choose
the tab for Wages & Income
- Scroll down to the
topic Less Common Income. (You may have to click Add more income and See a list to find it.)
- Scroll to the very
last item Miscellaneous Income, 1099-A, 1099-C and
choose Start/Edit
- This will open the
screen for Miscellaneous Income. Scroll down again to Cancellation
of debt (Form 1099-C) or the abandonment and/or acquisition of secured
property (Form 1099-A) and Start/Edit
- The first screen
says Tell us about your canceled debt.
- Choose the correct
radio button and Continue to complete
the interview.
