News & Articles

Tax Implications When Lenders Cancel Debts in the COVID-19 Era

Posted on Wed, Sep 23, 2020

In the COVID-19-ravaged economy, debts can pile up beyond a borrower's ability to repay. Lenders sometimes may be willing to forgive (or cancel) debts that are owed by certain borrowers. While debt forgiveness can help struggling borrowers survive financially, it can sometimes trigger negative tax consequences. Here's what borrowers need to know about the tax implications of so-called "cancellation of debt" (COD) income. 

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Tags: Forgiveness of Debt, COVID-19

To Forgive Is Not Always Divine

Posted on Fri, Aug 19, 2016
F or tax purposes don't think that you're off the hook if another party forgives or cancels a debt. Under the "cancellation of debt" (COD) provision in the tax law, this seemingly generous act could result in an unexpected tax bill.

Some businesses and organizations must file Form 1099-C, Cancellation of Debt, when they forgive debts over a certain amount.

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Tags: Tax, Cancellation of Debt, Forgiveness of Debt

Tax Implications on Cancellation of Debt

Posted on Thu, Jun 12, 2014

To Forgive Is Not Always Divine

For tax purposes don't think that you're off the hook if another party forgives or cancels a debt. Under the "cancellation of debt" (COD) provision in the tax law, this seemingly generous act could result in an unexpected tax bill.

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Tags: Tax, EHTC Article, Tax Advisers, Articles, Cancellation of Debt, COD, Tax Consequences, Forgiveness of Debt