What to do if you receive a 1099-C
If you have had a debt settled for less than the balance, and it is over $600, you most likely will receive a 1099-C from the IRS.
At first, it looks like you will have to pay taxes on the "forgiven" amount, but not necessarily. If your liabilities were greater than you assets at the time of the settlement ("forgiveness"), the amount WILL NOT be included in your taxable income.
BUT.... YOU MUST FILE THE CORRECT FORM AND PROOF OF INSOLVENCY WITH YOUR TAX RETURN!
We have prepared a FREE, SIMPLE-TO-USE packet that will show you exactly what to do.
It is really simply and easy, so download your FREE Packet TODAY!
We have included:
- Simple Instructions
- Actual 1099-C
- Sample Asset-Liabilities Worksheet
- Example of a completed IRS Form 982
- Blank Form 982 for you to use