IRS Form 1099-C "Cancellation of Debt"

What Is Form 1099-C?

IRS Form 1099-C, Cancellation of Debt, is a legal document that reports a canceled, forgiven, never paid, or wiped out debt. You need to file Form 1099-C for each debtor with whom you have negotiated a debt cancellation.

Alternate Name:

  • Cancellation of Debt Form

Lenders and creditors send this document to the IRS and borrowers if the debt of $600 or more was forgiven or canceled. The amount of canceled debt may be the entire amount or portion of the total amount owed. These identifiable events include the following circumstances:

  1. Discharge in bankruptcy;
  2. Cancellation or extinguishment that makes the debt unenforceable in foreclosure or similar federal nonbankruptcy or state court proceeding:
  3. Cancellation or extinguishment when the creditor chooses foreclosure remedies that bar their right to collect the debt;
  4. Cancellation or extinguishment that makes the debt unenforceable under a probate;
  5. Cancellation or extinguishment when the 1099-C statute of limitations for collecting the debt expires;
  6. Discharge of indebtedness after the creditor and the debtor has entered into an agreement;
  7. Discharge of indebtedness after the creditor made a decision to cancel the debt.

Form 1099-C was released by the Internal Revenue Service (IRS) and the latest version of the form was issued in 2020 with all previous editions obsolete. You can download a fillable 1099-C Form through the link below.

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IRS Form 1099-C Instructions

Provide the following information in the Cancellation of Debt Form:

  1. Write down the creditor's name, address, telephone number, and taxpayer identification number;
  2. State the debtor's name, address, and taxpayer identification number;
  3. Enter the date of the identifiable event - the day when the debt was deemed canceled;
  4. Record the amount of the canceled debt;
  5. Report interest separately;
  6. Describe the origin of the debt - mortgage, credit card expenditure, student loans, etc.;
  7. If the debtor had personal liability for repayment of the debt, check the appropriate box;
  8. Enter the code to reflect the nature of the identifiable event. To find the code to use, consult with the official Instructions for Forms 1099-A and 1099-C, issued by the IRS;
  9. If you file this form for execution, foreclosure, or similar sale, indicate the fair market value of the property.

There are several copies of the Form 1099-C - submit them to the IRS, your creditor, and keep one for your records.

Where to Report 1099-C?

Form 1099-C mailing address depends on your place of residence:

Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Texas, Vermont, Virginia

Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301

Alaska, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming

Department of the Treasury, Internal Revenue Service Center, P.O. Box 219256, Kansas City, MO 64121-9256

California, Connecticut, District of Columbia, Louisiana, Maryland, Pennsylvania, Rhode Island, West Virginia

Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201

Your place of residence or a principal place of business is outside the U.S.

Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301

What Is a 1099-C Cancellation of Debt Notice?

When you resolve a debt, you may receive a 1099-C notice in your mail. The IRS considers canceled or forgiven debt as income. If you receive this form from a lender, you need to report the portion of the waived debt on that document to the IRS as taxable income. Enter the canceled amount on the "Other Income" line of your Form 1040, U.S. Individual Income Tax Return. The 1099-C tax rate you pay is the same as if you received the income as salary or wages. File Form 1099-C in the year that follows the reporting year in which the identifiable event occurs.

However, there are situations when income from a canceled debt is not taxable - 1099-C exceptions include certain bankruptcies, interest, non-principal amounts (fines, fees, penalties, and administrative costs), foreign debtors, guarantors and sureties, and 1099-C insolvency cases (taxpayers owe more in debt that they have in assets).

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Download IRS Form 1099-C "Cancellation of Debt"

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8585
VOID
CORRECTED
CREDITOR'S name, street address, city or town, state or province, country,
1 Date of identifiable event
OMB No. 1545-1424
ZIP or foreign postal code, and telephone no.
Cancellation
2020
2 Amount of debt discharged
of Debt
$
3 Interest, if included in box 2
1099-C
$
Form
Copy A
CREDITOR'S TIN
DEBTOR'S TIN
4 Debt description
For
Internal Revenue
DEBTOR'S name
Service Center
File with Form 1096.
5 Check here if the debtor was personally liable for
Street address (including apt. no.)
For Privacy Act and
repayment of the debt
.
.
.
.
.
.
.
.
Paperwork Reduction
Act Notice, see the
City or town, state or province, country, and ZIP or foreign postal code
2020 General
Instructions for
Account number (see instructions)
6 Identifiable event code
7 Fair market value of property
Certain Information
Returns.
$
1099-C
Form
Cat. No. 26280W
www.irs.gov/Form1099C
Department of the Treasury - Internal Revenue Service
Do Not Cut or Separate Forms on This Page — Do Not Cut or Separate Forms on This Page
8585
VOID
CORRECTED
CREDITOR'S name, street address, city or town, state or province, country,
1 Date of identifiable event
OMB No. 1545-1424
ZIP or foreign postal code, and telephone no.
Cancellation
2020
2 Amount of debt discharged
of Debt
$
3 Interest, if included in box 2
1099-C
$
Form
Copy A
CREDITOR'S TIN
DEBTOR'S TIN
4 Debt description
For
Internal Revenue
DEBTOR'S name
Service Center
File with Form 1096.
5 Check here if the debtor was personally liable for
Street address (including apt. no.)
For Privacy Act and
repayment of the debt
.
.
.
.
.
.
.
.
Paperwork Reduction
Act Notice, see the
City or town, state or province, country, and ZIP or foreign postal code
2020 General
Instructions for
Account number (see instructions)
6 Identifiable event code
7 Fair market value of property
Certain Information
Returns.
$
1099-C
Form
Cat. No. 26280W
www.irs.gov/Form1099C
Department of the Treasury - Internal Revenue Service
Do Not Cut or Separate Forms on This Page — Do Not Cut or Separate Forms on This Page
CORRECTED (if checked)
CREDITOR'S name, street address, city or town, state or province, country,
1 Date of identifiable event
OMB No. 1545-1424
ZIP or foreign postal code, and telephone no.
Cancellation
2020
2 Amount of debt discharged
of Debt
$
3 Interest, if included in box 2
1099-C
$
Form
Copy B
CREDITOR'S TIN
DEBTOR'S TIN
4 Debt description
For Debtor
DEBTOR'S name
This is important tax
information and is being
furnished to the IRS. If
you are required to file a
return, a negligence
5 If checked, the debtor was personally liable for
Street address (including apt. no.)
penalty or other
repayment of the debt
.
.
.
.
.
.
.
.
sanction may be
imposed on you if
City or town, state or province, country, and ZIP or foreign postal code
taxable income results
from this transaction
and the IRS determines
Account number (see instructions)
6 Identifiable event code
7 Fair market value of property
that it has not been
reported.
$
1099-C
(keep for your records)
Form
www.irs.gov/Form1099C
Department of the Treasury - Internal Revenue Service
Instructions for Debtor
Box 3. Shows interest if included in the debt reported in box 2. See Pub. 4681
to see if you must include the interest in gross income.
You received this form because a federal government agency or an applicable
Box 4. Shows a description of the debt. If box 7 is completed, box 4 also shows
financial entity (a creditor) has discharged (canceled or forgiven) a debt you
a description of the property.
owed, or because an identifiable event has occurred that either is or is deemed
Box 5. Shows whether you were personally liable for repayment of the debt
to be a discharge of a debt of $600 or more. If a creditor has discharged a debt
when the debt was created or, if modified, at the time of the last modification.
you owed, you are required to include the discharged amount in your income,
See Pub. 4681 for reporting instructions.
even if it is less than $600, on the “Other income” line of your Form 1040 or
Box 6. Shows the reason your creditor has filed this form. The codes in this box
1040-SR. However, you may not have to include all of the canceled debt in your
are described in more detail in Pub. 4681. A—Bankruptcy; B—Other judicial
income. There are exceptions and exclusions, such as bankruptcy and
debt relief; C—Statute of limitations or expiration of deficiency period; D—
insolvency. See Pub. 4681, available at IRS.gov, for more details. If an
Foreclosure election; E—Debt relief from probate or similar proceeding; F—By
identifiable event has occurred but the debt has not actually been discharged,
agreement; G—Decision or policy to discontinue collection; or H—Other actual
then include any discharged debt in your income in the year that it is actually
discharge before identifiable event.
discharged, unless an exception or exclusion applies to you in that year.
Box 7. If, in the same calendar year, a foreclosure or abandonment of property
Debtor's taxpayer identification number (TIN). For your protection, this form
occurred in connection with the cancellation of the debt, the fair market value
may show only the last four digits of your TIN (social security number (SSN),
(FMV) of the property will be shown, or you will receive a separate Form 1099-A.
individual taxpayer identification number (ITIN), adoption taxpayer identification
Generally, the gross foreclosure bid price is considered to be the FMV. For an
number (ATIN), or employer identification number (EIN)). However, the creditor
abandonment or voluntary conveyance in lieu of foreclosure, the FMV generally
has reported your complete TIN to the IRS.
is the appraised value of the property. You may have income or loss because of
Account number. May show an account or other unique number the creditor
the acquisition or abandonment. See Pub. 4681 for information about
assigned to distinguish your account.
foreclosures and abandonments. If the property was your main home, see Pub.
Box 1. Shows the date the earliest identifiable event occurred or, at the
523 to figure any taxable gain or ordinary income.
creditor's discretion, the date of an actual discharge that occurred before an
Future developments. For the latest information about developments related to
identifiable event. See the code in box 6.
Form 1099-C and its instructions, such as legislation enacted after they were
Box 2. Shows the amount of debt either actually or deemed discharged. Note: If
published, go to www.irs.gov/Form1099C.
you don't agree with the amount, contact your creditor.
VOID
CORRECTED
CREDITOR'S name, street address, city or town, state or province, country,
1 Date of identifiable event
OMB No. 1545-1424
ZIP or foreign postal code, and telephone no.
Cancellation
2020
2 Amount of debt discharged
of Debt
$
3 Interest, if included in box 2
1099-C
$
Form
Copy C
CREDITOR'S TIN
DEBTOR'S TIN
4 Debt description
For Creditor
DEBTOR'S name
For Privacy Act
and Paperwork
Reduction Act
5 Check here if the debtor was personally liable for
Street address (including apt. no.)
Notice, see the
repayment of the debt
.
.
.
.
.
.
.
.
2020 General
City or town, state or province, country, and ZIP or foreign postal code
Instructions for
Certain Information
Returns.
Account number (see instructions)
6 Identifiable event code
7 Fair market value of property
$
1099-C
Form
www.irs.gov/Form1099C
Department of the Treasury - Internal Revenue Service
Instructions for Creditor
To complete Form 1099-C, use:
File Copy A of this form with the IRS by March 1,
2021. If you file electronically, the due date is March 31,
• The 2020 General Instructions for Certain Information
2021. To file electronically, you must have software that
Returns, and
generates a file according to the specifications in Pub.
• The 2020 Instructions for Forms 1099-A and 1099-C.
1220. The IRS does not provide a fill-in form option for
To order these instructions and additional forms, go
Copy A.
to www.irs.gov/Form1099C.
Need help? If you have questions about reporting on
Caution: Because paper forms are scanned during
Form 1099-C, call the information reporting customer
processing, you cannot file Forms 1096, 1097, 1098,
service site toll free at 866-455-7438 or 304-263-8700
1099, 3921, or 5498 that you print from the IRS website.
(not toll free). Persons with a hearing or speech
Due dates. Furnish Copy B of this form to the debtor by
disability with access to TTY/TDD equipment can call
February 1, 2021.
304-579-4827 (not toll free).
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