Whenever a debt with a financial institution is forgiven by a creditor the creditor will issue a form 1099-C to the debtor in the year that the debt was cancelled. The creditor will also provide the Internal Revenue Service (IRS) with a copy of the 1099-C reflecting the amount of the debt that was forgiven.
Whenever you receive a 1099-C it is important that you seek a Ft. Lauderdale CPA to ensure that your tax return is accurately prepared. In general the amount of debt forgiven must be included on your tax return as additional income, however, there are circumstances that may enable you to exclude this amount from your tax return and reduce your tax liability.
If you have received a 1099-C and wish to speak to one of our CPAs please call us at (954) 519-2528.