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IRS Forms Handbook 1099-A and 1099-C

IRS Forms Handbook 1099-A and 1099-C

Cancelation of debt occurs in many situations, including:

  • Home loans (original or home equity),
  • Car loans,
  • Credit card debt,
  • Student loans,
  • Medical care,
  • Professional services, and
  • Installment purchases of furniture, home appliances, and other personal property.

This Handbook focuses on the requirement that lenders report to the IRS the cancellation of debt when certain events occur. The general concept that a lender must report to the IRS events indicating cancellation of debt is easy to grasp. It is not always clear, however, when an event indicating cancellation of debt has occurred that must be reported. Whether the cancellation of debt results in income for the debtor is not the focus of this Handbook, but is discussed to provide background for the types of transactions that give rise to a lender’s reporting requirements.

Get access to our IRS Forms Handbook by filling out the form below:

Insights

Alert

1099-C Discharge without Debt Cancellation Not Consumer Protection Law Violation

May 10, 2021

Once again, a borrower who argued his debt was cancelled when he received an IRS Form 1099-C was told by the court that it was merely discharged. The court says “discharge” is not “actual discharge.” While acknowledging that a common consumer may not easily understand the distinction, the court held that “discharge” for IRS reporting purposes is not necessarily “actual discharge” of the obligation.

Podcasts

Podcast: When Is Form 1099-C Required of Lenders?

January 22, 2021

When debt is forgiven, as much of the funding lent through the CARES Act’s PPP may be, a lender may be required to file IRS Form 1099-C with the IRS and to furnish a copy to the borrower. As a lender, do I need to file the 1099-C when I forgive a PPP loan, or when we finalize a restructuring or settle a case alleging a violation of state or Federal lending law?

Alert

IRS Announces Form 1099-C Not Required for PPP Loan Forgiveness

September 22, 2020

IRS Announcement 2020-12 notifies lenders that they should not file IRS Form 1099-C with the IRS or furnish it to borrowers to report the amount of qualifying forgiveness with respect to covered loans made under the Paycheck Protection Program (PPP).

Alert

Is 1099-C Required for Lenders on Forgiven PPP, EIDL Funds?

June 17, 2020

To address the adverse economic consequences to businesses and employees caused by the coronavirus, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted. It amends Section 7 of the Small Business Act to provide a new type of loan to small businesses. This is the Paycheck Protection Program (PPP) loan (SectionMore

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  • Media item: Douglas W. Charnas
    Douglas W. Charnas
    dcharnas@mcglinchey.comMember

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