A Form 1099-C is received when a debt (home, credit card, student loan, etc.) you had is cancelled. This happens when you receive money or goods but, due to circumstances, are not required to pay all or a portion of the amount back to the borrower (debt was cancelled). Because you are not paying the whole amount of the debt back, the IRS considers the amount not paid as taxable income, and it must be reported on your return.
There are certain circumstances when you can exclude the cancelled debt from your income. For information about these circumstances, enter the information about the cancelled debt and continue to the Exclusions section below.
