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Do I need to report this cancelled debt? (One 1099-C, one without it)

I received a 1099-C from a creditor (large enough to generate a 1099-C.) The amount discharged reads as $6,497.23.

I haven't engaged with this creditor for over 7 years.

I knew there was another smaller card from them so I did call and confirm that the other debt was discharged as well: The smaller card = $779.72 total discharged but principal was $498.09 (no interest or late fees) so they said that since the principal was under $600, no 1099-C was sent.

I have some questions:

  1. Do I still report this second debt on taxes?

  2. Do I do so as if I received a second 1099-C from the creditor and just input two separate but identical (aside from the amount) 1099-C forms?

  3. Do I put the entire amount ($779.72) or the principal ($498.09)?

  4. On the 1099-C that I have, the "amount discharged" seems like it may be the PRINCIPAL ONLY ($6,497.23) and not including interest or fees (old credit report from 2019 shows "Original Charge Off: $7,538") so I'm not sure. What is usually shown on there? It seems like it shows principal only and that I would report the principal only for the second one if I am required to. Please let me know what you think.

Thanks in advance!

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1 Reply
RobertB4444
Employee Tax Expert

Do I need to report this cancelled debt? (One 1099-C, one without it)

You should enter it as though you had received a second 1099-C exactly as you figured.  You should enter the principal amount only.

 

@shanesnh 

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