If a credit card company or mortgage lender cancels your debt, it could result in taxable income that you must report to the IRS. Your lender will mail you Form 1099-C with the amount of canceled debt for you to report as ordinary income on your income tax return. However, certain exceptions or exclusions (https://bit.ly/3XXW2vG ) may lower or eliminate this taxable amount. If you qualify (for reasons such as bankruptcy or insolvency), you must report the canceled debt amount and reason for an exclusion on Form 982. Note that special rules apply for student loan debt canceled between 2021 and 2025. Contact us with questions. © 2025