I have received forms 1099-C on debt I am still paying on. The credit card companies have agreed to accept less than owed them

[prbalcom]

I have taken out loan to pay off these reduced debts, do I have to claim these forms?

[HelenaC · Accepted solution]

Yes, you do. You must report as taxable income on your return, any taxable amount of a cancelled debt for which you are personally liable from the cancellation of debt. You must report the taxable amount of a forgiven debt whether or not you receive a Form 1099-C.

Refer to Publication 4681 (2016), Canceled Debts, Foreclosures ... - IRS.gov , for more information regarding taxability of canceled debt, how to report it, and related exceptions and exclusions.

To enter a 1099-C form:

How do I enter a 1099-C?

How do I enter a 1099-C?

1. Open (continue) your return.
2. In the TurboTax program, search for 1099-C or 1099C (lower-case works also) and then click the "Jump to" link in the search results.
3. Select the type of cancelled debt (main home or other) and then click Continue.
4. Follow the onscreen instructions to enter information from your 1099-C.

Note: We don't support both types of canceled debt if they were both reported on 1099-C. In this uncommon situation, refer to IRS publications 544 and 4681 before proceeding, or consult with a professional tax preparer.

Related Information:

• Can I exclude my 1099-C from my taxable income?
  
• Is cancelled, forgiven, or discharged debt taxable?
• Do I need to report cancelled debt from a credit card or car loan?
• Will a bankruptcy affect my taxes?
• What qualifies for mortgage forgiveness debt relief?