Forms 1099-C and 1099-A

You usually do not need to report the amounts as taxable income, reported to you on forms 1099C or 1099A.

The Mortgage Forgiveness Debt Relief Act of 2007, effective through 2016, allows individuals to exclude from income any discharges of qualified principal residence debt of up to $2 million (or $1 million if married and filing a separate return). The house must have been used as a main home, which means it was your principal place of residence.

Canceled debts do not need to be included in taxable income if the debt was canceled in a bankruptcy case, if the individual is insolvent, or if the canceled debt was intended as a gift. Insolvency is when your debts exceed your assets at the time the debt was canceled.