Cancelled Debt Income is Taxable! Use IRS Form 982 to Reduce Taxes on COD Income

For a 2023 update:    • Form 1099-C & Form 982 - Cancelled De...  
For a 2022 update:    • IRS Form 1099-C Explained with Form 9...  

If you received Form 1099-C during the year, that is taxable income!

Believe it or not, canceling debts is taxable income to a U.S. taxpayer, so it must be reported on your tax return. In certain cases, however, you might be able to exclude that income from your gross income.

One of the easiest methods is to claim you are insolvent. Use Form 982 to claim insolvency.

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