Have you filed a bankruptcy in the last tax year? In a bankruptcy, debt is discharged, cancelled, or forgiven, and this can have tax implications because it is viewed by the IRS as taxable income to you (Cancellation of Debt Income or CODI).
Bankruptcy and Tax
Common types of debt that are discharged include automobile loans, foreclosures of personal residence, and credit card debt.
IRS Bankruptcy Tax Form
If you have any discharged, forgiven, or cancelled debt from a bankruptcy of an amount greater than $600, the lender will issue you IRS Form 1099-C by January 31 of the following tax year.
Canceled Debt that Qualifies for Exception or Exclusion to Income Tax
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