my husband and i have a joint bank account from which i made the payments on the loan, paying more than the payment amount each time i could until the loan was paid off. discover paid interest on the refunded amount.
If you have received a Form 1099-C you should report the Form 1099-C in TurboTax as shown. If your Form 1099-C has an amount in Box 2 or 3 "Cancelled Debt Amount" or "interest amount" it will be considered taxable when you enter it into TurboTax.
If you believe that your 1099-C was issued incorrectly, you should contact the issuer of the Form 1099-C to discuss it and possibly get them to issue a corrected form. The IRS would have been provided a copy of the form.
Form 1099-C is to be used only for cancellations of debts for which the debtor actually incurred the underlying debt.
In most situations, if you have received a Form 1099-C, "Cancellation of Debt," that is from a lender that forgave your debt, you are required to report the amount of cancelled debt on your tax return as taxable income.
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Click here for additional information on Form 1099-C.
Click here for "When to Use Tax Form 1099-C for Cancellation of Debt"