TurboTax FAQ
TurboTax FAQ
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Do I need to report cancelled debt from a credit card or car loan?

Yes. Cancelled debt, often accomplished with the help of credit counselors and debt settlement agencies, needs to be reported.

Your lender will send you a 1099-C form which includes the amount of cancelled debt. Simply enter your 1099-C to report it on your return.

Although cancelled debt often counts as taxable income, that's not always the case. Exceptions include bankruptcy and cancelled mortgage debt. When you enter your 1099-C, we'll ask followup questions to determine if its taxable or not.