Get 1996 Form 1099C. Cancellation Of Debt

The payer fills out the form with the appropriate details and sends copies to you and the IRS, reporting payments made during the tax year. In some instances, a copy is also sent to your state taxing authority. The payer is responsible for filling out the appropriate 1099 tax form and sending it to you.

File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if: You are an applicable financial entity. An identifiable event has occurred.

If you receive a 1099-C on an old debt, your best option is to contact a CPA or tax professional. They'll help you determine how to settle the outstanding tax issue.

In general, if your debt is canceled, forgiven, or discharged for less than the amount owed, the amount of the canceled debt is taxable. If taxable, you must report the canceled debt on your tax return for the year in which the cancellation occurred.

Is a 1099-C Form Good or Bad for Your Credit? The 1099-C form shouldn't have any impact on your credit. However, the activity that led to the 1099-C probably does impact your credit.

If you forget your 1099-C, you may be able to amend your return and correct the situation. Depending on how long the form is left off your taxes, the IRS may conduct an audit.

If a debt is owned (or treated as owned for federal income tax purposes) by more than one creditor, each creditor that is described under Who Must File, earlier, must issue a Form 1099-C if that creditor's part of the canceled debt is $600 or more.

If you don't report the taxable amount of the canceled debt, the IRS may send you a notice proposing to assess additional tax and may audit your tax return. In addition, the IRS may assess additional tax, penalties and interest.