Debt Cancellation for Credit Card
I agreed to a debt cancellation of $6146 and paid the remaining amount due of $8980 in July 2007. I have copies of the paid transaction in July 2007. By Jan 31, 2008, I had not received any tax documents from the credit card company so I did not claim debt cancellation on my 2007 taxes. At the time, I was nieve of the tax drawbacks.
In Feb 2008, I received an unusual looking "Tax Statement" with the amount of $6146 being reported to the IRS as debt cancelled in 2008. I set it aside to be filed away later.
Today I was filing away my trayfull of documents, etc and found this document again and saw in small print that it was a 1099-C. I searched the IRS publications for information on 1099-C, but this computer generated print-out looks nothing like the examples.
I have already filed my e-taxes and we are finally expecting a tax refund.
What will happen now?
Re: Debt Cancellation for Credit Card
You'll need to file an amended tax return, completely explaining why you have to amend it (tax form arrived after you had already filed).
There are good tips for amending your return here and here.