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
You can get my latest articles full of valuable tips and other information delivered directly to your email for free simply by entering your email address below. Your address will never be sold or used for spam and you can unsubscribe at any time.
Advertiser Disclosure: MyDollarPlan.com is an independent, advertising-supported service. The offers that appear on this site are from companies which MyDollarPlan.com receives compensation. This compensation may impact how and where products appear on this site, including, for example. the order in which they may appear within listing categories. Other factors, such as our own proprietary website rules and the likelihood of applicants' credit approval also impact how and where products appear on this site. MyDollarPlan.com does not include the entire universe of available financial or credit offers.
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.