No, there is no provision for a deduction from Line 21 "Other Income" which is how 1099-C income is reported.
If you do not report the full amount as reported on the 1099-C the IRS will send a letter that the amounts do not match.
That being said, there are several ways you can exclude the income so I would advise you to review these exclusion criteria to see if that might be an option.
They are:
1. What if I do not receive a 1099-C from the credit card company? Are they supposed to mail them out by January 31st?
2. Can I write it off as a business expense for legal and/or professional fees?
Thank you for the help.
It is unlikely you would not receive your copy. It was only in recent years that 1099's were required to be issued by end of January. It used to be end of February. In my experience, many companies still send them late. If you haven't received it yet, I would recommend waiting until closer to mid March to file.
With respect to deducting legal fees as an expense, if you have other self-employment income and somehow the debt that was forgiven was associated with that self-employment income (say you incurred credit debt to start a business and the debt was forgiven), then perhaps you have an argument for a deduction against that self-employment income, but I would not recommend trying that.
This is the link to a court decision of debt cancellation fees. Unless something has changed based on this decision so long as the fees result in a reduction in the credit card debt then the fees are deductible. here is the link:https://www.gamezlawfirm.com/debt-resolution-fees-are-tax-deductible/
Do you have to claim a forgiven debt reported on a 1099-C for a spouse who passed 3 years prior to the debt being forgiven and it is only in their name?