What to Expect with Cancelled Debt
If a creditor discharged $600 or more of debt and you received a Form 1099-C, you may be required to report the debt discharge as income on your tax return. Ironically, this can result in a hefty tax bill. Fortunately there are a few exceptions that apply. While there is no general “hardship rule,” if you can show that some of these exceptions apply, you may not have to pay tax on all or part of the amount. Common Exceptions to COD Income Taxes **If you qualify for any of th