Why is ‘Canceled Debt’ Taxable? (and what you can do about it)

Photo by rawpixel on Unsplash For a lot of people in the US, owning a credit card is a natural thing. So are credit card payments. Unfortunately, it is really easy to fall behind on those payments. If you fall far enough behind, you can negotiate with the credit card company and they may cancel some of the debt you owe. If they cancel some or all of your remaining debt, they will send you a 1099-C form in the mail. Then, when you go to get your taxes done for that year, your tax preparer adds that amount of canceled debt as…

Read More