Understanding the 1099-C (Cancellation of Debt) in a California Real Estate Sale
What to do when you receive a 1099-C after a short sale or foreclosure.
When a lender forgives a portion of your mortgage debt, they issue a Form 1099-C, which the IRS may treat as taxable income. Understanding insolvency exceptions and how to properly report this on your tax returns is critical. As your Listing Attorney, we structure the short sale approval to clarify the nature of the forgiven debt, aiding your CPA in protecting you from unexpected tax bills.