What if I never received a 1099C for debt cancellation - Do I report that.

[chugheslaw]

I have a two part student loan in collections - part one was settled for a reduced amount leaving a deficiency - cancelled debt, but I'm still paying on part 2. I didn't receive a 1099C for the part one debt cancellation. Do I need to report that cancellation and how do I without the 1099?

[Patrice · Accepted solution]

No, you would not report it on your 2016 tax return if you did not receive a 2016 1099-C.  You should wait until you receive the 1099-C from the lender.  Although, you have satisfied part one of the settlement they may not issue the 1099-C until the entire amount is satisfied.  At that time the lender will report the cancellation of debt to the IRS and send you a copy of the 1099-C.  At that time is when you will be required to file the cancellation of debt on your tax return in the tax year that you receive the 1099-C and not the year that you settled the debt.