Law Office of James L. Keenan

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James Keenan Law

Contact me for a free consultation!

PH 916.448.6923

TXT 916.715.6145

EMAIL James now!

Contact me for a free consultation!

PH (916) 448-6923

TXT (916) 715-6145

EMAIL James now!

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Is debt discharged through bankruptcy considered income on taxes?

Is debt discharged through bankruptcy considered income on taxes?

No. If a debt is forgiven or otherwise cancelled outside the bankruptcy context, that amount can be considered income on your taxes. Often people receive a 1099 (1099-C) for the amount of debt that is cancelled and must pay taxes on that amount.

Here is what a 1099 looks like for cancellation of debt income:

1099 c form

But if you file bankruptcy, the debt is discharged and, according to the IRS, cannot be considered income.

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Law Offices of James L. Keenan

2600 H St. Sacramento, CA 95816

Phone: 916-448-6923

Fax: 916-442-6524

Email: jameslkeenan@aol.com

Office Hours: Monday – Friday 8 a.m. – 5:30 p.m.

Evening Appointments Available

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