A lender issues Form 1099-C when a debt is canceled. If you
received a Form 1099-C because a debt that you owed has been canceled you might
need to include this amount as income on your return.
Income from
cancellation of debt is not taxed if any of the following conditions apply:
- The
cancellation is intended as a gift
- The debt is
qualified farm debt
- The debt is
qualified real property business debt
- You are
insolvent or bankrupt
- The debt is
qualified principal residence indebtedness
In TurboTax, you
will need to do the following:
- Federal
Taxes
- Wages &
Income
- Less Common
Income
-
Miscellaneous
Income, 1099-A, 1099-C, please click Start
-
Cancellation
of debt (Form 1099-C) or the abandonment and/or acquisition of secured
property (Form 1099-A), please Start