The first step for filing is to prepare Form 1099-C by collecting all of the required information.
Form 1099-C is used to report cancelled debts of $600 or more by certain entities and if an identifiable event occurs.
What is new for Form 1099-C?
The IRS has switched to a continuous use form and instructions for Form 1099-C. These will now only be updated as needed, instead of annually. This was announced in the latest version of the instructions, Rev. January 2022.
What information is needed to prepare Form 1099-C?
The information required for preparing Form 1099-C includes basic information on the creditor and debtor and information about the cancelled debt.
Creditor Information
The following information is required for the creditor:
- Creditor’s name
- Creditor’s address
- Creditor’s phone number
- Creditor’s Taxpayer Identification Number (TIN)
Debtor Information
The following information is required for each debtor:
- Debtor’s name
- Debtor’s address
- Debtor’s Taxpayer Identification Number (TIN)
Debt Cancellation Information
The following information is required on the cancelled debt:
- Date of identifiable event
- Amount of debt discharged
- Interest, if included in the amount of debt discharged
- Debt description
- Checkbox to indicate if the debtor was personally liable for repayment of the debt
- Identifiable event code
- Fair market value of property
Next Steps
Once you have gathered information to prepare Form 1099-C, you can:
Don’t forget to check the deadlines to avoid any potential late filing penalties!
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.
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