1099-C

[cbeldridge]

It is Feb 9th 2021 and am not sure if I was going to get a 1099-C from a debt that has gone into collection 5 months ago. How long do I have to wait to see if I am getting a 1099-C to file my taxes?

[RayW7]

It may be a couple years before they decide to foreclose and cancel your debt and issue you the 1099-C form, although they often do it in the following year. You should call your lender and ask, but they don't often know the date when 1099-C may be issued.

[cbeldridge]

Thanks RayW7 The lender had no idea what I was talking about. I want to file on the 12th but don't want to be audited, slowing down my return.

[DianeW777]

I can understand that. For IRS purposes, if you do not receive a Form 1099-C for cancelled debt, you should file your return for 2020. There's no harm in waiting, a while since it's early in the season, especially if you are concerned that you might owe money back.

If you should receive the document later and it's dated 2020, then you can amend your return by using the links below.

• How to amend (change or correct) a return already filed (and accepted at the IRS)
• Steps to amend my 2020 return

If you should get the form it should be entered into TurboTax using the following steps.

To enter your 1099-C:

1. Open or continue your return, if it isn't already open.
2. From the upper right menu, select and search for 1099-C or 1099C (lower-case also works).
3. Select the Jump to link at the top of the search results.
   • If using Free Edition or TurboTax Live Basic, follow the prompts to upgrade to Deluxe.
4. On the Tell us about your canceled debt screen, select Yes.
5. Select the type of canceled debt (main home or other) and then select Continue.
6. Follow the instructions to enter info from your 1099-C.

[cbeldridge]

Will it be OK if I just add the amount of the cancelled debt to other income if I don't receive a 1099-C?

[ToddL99]

If you didn't receive a 1099-C,  do not add the amount of the cancelled debt to other income. It isn't considered cancelled debt income until the issuer sends a Form 1099-C.

You may never receive a From 1099-C, in which case you'd be paying tax unnecessarily.

You may receive a Form 1099-C in 2021 (or even later), and you would have to report it as income in the year received.

[cbeldridge]

So since it is 2021, if I get a 1099-C, I would just claim it on next years taxes?

[JohnW152]

You'd need to file your 1099-C on your return for the year shown in the box that says OMB No. 1545-1424 on your Form 1099-C, Cancellation of Debt.

Income is generally reported in the year received or, in the case of 1099-C, when the debt is cancelled.