What to Do With 1099-C
You may have received 1099-C if had debt cancelled since cancelled debt is considered taxable income. You can add this to your eFile account to generate the needed forms and add it to your taxable income.
File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if: a) You are an applicable financial entity b) An identifiable event has occurred.
2. Where Do I Enter Data?
eFile will guide you through entering all types of income. You will come across adding the information from your 1099-C as you work through the Federal Taxes section and the proper forms will be generated for you.
3. How to Manually Add Data
To manually add your form, navigate to Federal Taxes > Review > I'd like to see the forms I've filled out or search for a form and enter "1099-C" to add the information from your cancelled debt form. In most cases, this cancelled debt should be counted towards your individual income. Select 1040 - Individual Return from the flow dropdown to include this with your individual income.
4. Box Descriptions
There are many boxes on the form and you will want to enter boxes 1-7 into eFile:
1: Date of identifiable event
2: Amount of debt discharged
3: Interest, if included in box 2
4: Debt description
5: Checkbox for if the debtor was personally liable for repayment of the debt
6: Event code
7: Fair market value of property.
5. How to Add, Delete a Form or Page
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