What is insolvency, and why is it important? What is Form 1099C? Is it taxable? Is the cancellation of Debt taxable? How do I know if I am insolvent?
Getting a 1099c for cancellation of debt is sometimes taxable and sometimes not. 1099c income is not taxable if you qualify as insolvent. You need to complete an insolvency worksheet as proof that you were insolvent at the time the debt was cancelled.
Download the worksheet from my shop.
The IRS page with information on discharge of debt is here.
