IRS Form 1099-C, Cancellation of Debt, is used by a lender to report canceled or forgiven debt of $600 or more.
What It Means
Canceled debt is the amount of loan that the borrower is no longer required to pay. Debt may include principal, interest, fees, penalties, administrative costs, and fines. The lender furnishes Form 1099-C to the borrower and the IRS. The lender has to prepare three copies of Form 1099-C: Form A, Form B, and Form C. Form A is provided to the IRS, Form B is provided to the borrower, and Form C is retained by the lender for its records.