tag:blogger.com,1999:blog-2135788133426971614.post3374427159488592074..comments2024-03-28T01:09:48.303-07:00Comments on 21st Century Taxation: Complexity for individuals dealing with 1099-C for cancelled debtProfessor Nellenhttp://www.blogger.com/profile/03288632402197167948noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2135788133426971614.post-71321690425413864062012-02-14T16:13:58.859-08:002012-02-14T16:13:58.859-08:00Debtors may not always be given a 1099-C because t...Debtors may not always be given a 1099-C because the lender may forget or fail to file it or the lender is not in a trade or business (such as for a loan from a friend (assuming it is a true loan and not a gift). For 1099C instructions, see http://www.irs.gov/pub/irs-pdf/i1099ac.pdf. Borrowers in tough financial problems may move and the 1099C doesn't reach them. In that case, the IRS will eventually send a notice (and bill). You are right that many borrowers don't think of the debt cancellation as being income because there is no receipt of cash at the time (that happened when they borrowed).Professor Nellenhttps://www.blogger.com/profile/03288632402197167948noreply@blogger.comtag:blogger.com,1999:blog-2135788133426971614.post-64239524346165332712012-02-14T15:31:38.138-08:002012-02-14T15:31:38.138-08:00Annette,
It is not intuitive for most that forgiv...Annette,<br /><br />It is not intuitive for most that forgiven debt is income in the first place, let alone that there may be a credit that can be used to offset some or all of it. <br /><br />Is it always the case the taxpayer will be notified they have "forgiven debt income"?david k waltzhttp://treasurycafe.blogspot.comnoreply@blogger.com