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atarver
New Member

I have a 1099-C for the Texas B-on-Time loan that was forgiven. Do I need to include that in my taxes?

I was forgiven $20,366 of the Texas-B-on-Time loan because I met the requirements to have it forgiven.
2 Replies
AndreaG
New Member

I have a 1099-C for the Texas B-on-Time loan that was forgiven. Do I need to include that in my taxes?

Yes. You need to report the 1099C Form on your tax return. This income is reportable and taxable. Please refer to the following FAQ for instructions on how to enter this form in Turbo Tax. https://ttlc.intuit.com/replies/5107826

Patrice
New Member

I have a 1099-C for the Texas B-on-Time loan that was forgiven. Do I need to include that in my taxes?

The 1099-C must be entered into your tax return because you'll have to report the amount on that 1099-C form to the Internal Revenue Service as taxable income.

In general, if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable and you must report the canceled debt on your tax return for the year the cancellation occurs. The canceled debt isn't taxable, however, if the law specifically allows you to exclude it from gross income. These specific exclusions will be discussed later.

After a debt is canceled, the creditor may send you a Form 1099-C (PDF), Cancellation of Debt, showing the amount of cancellation of debt and the date of cancellation, among other things. If you received a Form 1099-C showing incorrect information, contact the creditor to make corrections. For example, if the creditor is continuing to try to collect the debt after sending you a Form 1099-C, the creditor may not have canceled the debt and, as a result, you may not have income from a canceled debt. You should verify with the creditor your specific situation. Your responsibility to report the taxable amount of canceled debt as income on your tax return for the year when the cancellation occurs doesn't change whether or not you receive a correct Form 1099-C.

In general, you must report any taxable amount of a canceled debt as ordinary income from the cancellation of debt on Form 1040 (PDF), U.S. Individual Income Tax Return, Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return, if the debt is a nonbusiness debt, or an applicable schedule if the debt is a business debt, as explained in Publication 4681 (PDF), Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals).

Caution: If property secured your debt and the creditor takes that property in full or partial satisfaction of your debt, you're treated as having sold that property for the amount of the canceled debt and may have a taxable gain or loss. The gain or loss on a deemed sale of your property is an issue separate from whether any cancellation of debt income associated with that same property is includable in gross income. See Publication 544, Sales and Other Dispositions of Assets, and Publication 523, Selling Your Home, for detailed information on reporting gain or loss from repossession, foreclosure, or abandonment of property.

https://ttlc.intuit.com/replies/5107826

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