I have a 1099-C (Cancellation of Debt) from my financial aid lending company. How to file it with Taxcut?

I have a 1099-C (Cancellation of Debt) from my financial aid lending company. $595.00 was cancelled in 2006.

a) Do I need to claim it as income (or did they make it $595.00 specifically because there is a $600.00 limit or something)?

b) If I do need to claim it, how the heck to I do that using H&R Block Taxcut? I have never had a problem with their program before, but this year I have this weird form and have no idea where it goes. I searched for 1099-C in the program and got nothing...a bunch of 1099's but no -C.

Update:

For Peggy K:

This is the last time I use Block. My login was working one minute, but it logged me out after 5 minutes, and after that I could not log back in. Said "Three unsuccessful attempts, locked out after 20 minutes." 20 minutes later, same BS. Opened a second account, tried to get my question answered, but it says my Key Code on the back on my CD sleeve from Premium Federal, State, +eFile is no good. But, they will still let me use a credit card to pay for it, thank goodness! And I love that there is no phone number available to call them. Ridiculous.

Anyway, not sure where exactly you are telling me to claim this $595 in my taxes, but I tried it under 1099-MISC and it ended up raising the amount I owe by like $100.

Update 2:

Never mind, got the first login to work....awaiting phone call.

3 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    I work for Block, and I don't remember seeing anything in their software for a 1099-C, just pulled up my personal copy of TaxCut and, just like you, didn't see it there either.

    I think... you should just enter it as "other income" and describe it as "1099-C cancelled debt" in the same general location in the "flow" as you'd put jury duty or other things. It should appear on the front of the 1040, just above the Adjustments to Income section.

    I believe that's where I'd put it if I were doing your forms for Block.

    This isn't like a capital gain, and there ought not be any additional taxes associated with it, like a capital gain or like pulling $ out of a retirement fund. Sure hope this helps.

  • haspel
    Lv 4
    4 years ago

    So, you're conscious which you had some debt in 2002. became into that surely paid or did the lender basically give up attempting to hold jointly the money? lenders sell the debt to debt creditors approximately 3 years later and the 1st debt collector would sell it to a distinctive 3 years later too. while the final debt collector provides up because of the fact fo the statute of obstacles (which even however all of us say 7 years is surely around 8 for the workplace work), he archives the 1099-C with the IRS. via 7 years later, the handle could be incorrect, however the call and SSN are not. From the IRS's perspective, in case you never paid the debt and that they lender can no longer carry jointly, you have earnings this is totally taxable. in case you could teach you paid the unique debt, you touch E-solid contract business enterprise and demand they $0 out the 1099-C. you're making copies of your payoff and can attempt to coach the IRS that the debt in question became into if actuality be told paid.

  • 1 decade ago

    Yes, you do need to claim it. I'm not sure about the software, but in what I used in my job, it might be listed in sources of income. The amount you were paid goes on the line 'other income'.

    Source(s): I looked it up on irs.gov.
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