When I defaulted on my loan payments, the lender issued a Form 1099-C which makes it look like I was paid income – what’s that all about?
Thanks in large part to a wrongly-decided Depression-era U.S. Supreme Court case, if you borrow money and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes. The theory is that the portion of the loan you will no longer be required to pay back is a "windfall" reportable as income. The lender is usually required to report the am…
“Whereas I used to cower in fear at the thought of having to deal with my tax issues, I actually began to look forward to each step because I knew I was in capable hands and Joe always put me at ease.