The IRS expects you to include the amount when you file your tax return.

I went for a settlement and the account has been closed. However, I received a 1099-C few days back. Can anyone here tell me how it’s going to affect my taxes?

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You’ll have to pay taxes on the forgiven or reduced amount for the settlement. The IRS expects you to include the amount when you file your tax return. There are some exceptions applicable though.


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