Cancelled Debt Income is Taxable! Use IRS Form 982 to Reduce Taxes on COD Income

2 years ago
88

If you received a Form 1099-C during the year, that is taxable income!

Believe it or not, cancellation of debts is taxable income to a U.S. taxpayer, so it has to be reported on your tax return. In certain cases, however, you might be able to exclude that income from your gross income.

One of the easiest methods is to claim you are insolvent. Use Form 982 to claim insolvency.

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