If, in the same calendar year, you cancel a debt of $600 or more in connection with a foreclosure or abandonment of secured property, it is not necessary to file both Form 1099-A and Form 1099-C, Cancellation of Debt, for the same debtor. You may file Form 1099-C only. You will meet your Form 1099-A filing requirement for the debtor by completing boxes 4, 5, and 7 on Form 1099-C. However, if you file both Forms 1099-A and 1099-C, do not complete boxes 4, 5, and 7 on Form 1099-C.
The boxes have been now rearranged on the Form 1099-MISC. Box 7, where nonemployee compensation was once reported, and now it shows the check box for direct sales of $5,000 or more. The deadline for filing the 2020 tax year’s 1099-MISC is March 31, 2021 if filing electronically.
The creditor's phone number must be provided in the creditor's information box. It should be a central number for all canceled debts at which a person may be reached who will ensure the debtor is connected with the correct department
Do not file Form 1099-C when fraudulent debt is canceled due to identity theft. Form 1099-C is to be used only for cancellations of debts for which the debtor actually incurred the underlying debt
File Form 1099-C, Cancellation of Debt, for each debtor for whom you canceled a debt owed to you of $600 or more if:
You are an entity described under Who Must File below, and
An identifiable event has occurred. It does not matter whether the actual cancellation is on or before the date of the identifiable event. See When Is a Debt Canceled, later.
Form 1099-C must be filed regardless of whether the debtor is required to report the debt as income.
The debtor may be an individual, corporation, partnership, trust, estate, association, or company. Do not combine multiple cancellations of a debt to determine whether you meet the $600 reporting requirement unless the separate cancellations are under a plan to evade the Form 1099-C requirements.
