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Reporting cancellation of a debt

January 26, 2023
January 26, 2023

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Q. We handle the owner's personal finances as well as the business's. On the owner's personal “company/database,” he has a few notes payable to individuals that have long matured with no payments. Are we able to issue a 1099 to them as reportable income for the debt, or is this just a personal debt loss on his end? A. (Answered by IOFM's third-party tax experts) IRS Form 1099-C, the "Cancellation of Debt" tax information return which reports a debtor as the recipient of income when a debt is…

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