IRS 1099-C Cancellation of Mortgage Debt

Many, many people have received IRS 1099-C, Cancellation of Debt.  This document looks similar to a 1099-Div or a 1098 interest paid.  Don’t be confused! Adding that debt to your income tax form could result in a hefty tax bite for you to pay.  You must be careful!  Just because the bank issued it to you does not necessarily mean you have to report it.  You need sound legal advice.

Please know that the bank that sent it to you may have done so because it is required under the law to send the notice for the regulation of it as a bank.  IRS 1099-C in and of itself does not necessarily require that you pay tax on the amount shown in the boxes.  You might have to report it on your 20140 but in fact, there is a good chance you do not.  As always, information and knowledge is the key.

Check back here again soon for an update.  Taking the wrong position on a 1099-C can be very costly to you.