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In most situations, if you receive a Form 1099-C from a lender after negotiating a debt cancellation with them, youll have to report the amount on that form to the Internal Revenue Service as taxable income. Certain exceptions do apply.
Use Form 8888 if: You want us to directly deposit your refund (or part of it) to either two or three accounts at a bank or other financial institution (such as a mutual fund, brokerage firm, or credit union) in the United States, or You want to use at least part of your refund to buy up to $5,000 in paper or
If you have more than $600 of debt forgiven, your lender should send you a 1099-C Cancellation of Debt form. This form is a tax document that the lender is required to file. It will help you determine if you owe taxes on any forgiven debt or if the forgiven debt is exempt from taxation so have it ready at tax time.
All Form 8888 deposits must be to accounts in your name, your spouses name, or a joint account. You cant file Form 8888 if you file Form 8379 (Injured Spouse Allocation). File Form 8888 electronically to get your refund faster.
Theres no way to change your bank information once the IRS has accepted your e-filed tax return. You can check the status of your refund by using the IRSs Wheres My Refund? tool.
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People also ask

Form 982 is used to determine, under certain circumstances described in section 108, the amount of discharged indebtedness that can be excluded from gross income.
More In Forms and Instructions File Form 1099-C for each debtor for whom you canceled $600 or more of a debt owed to you if: You are an applicable financial entity. An identifiable event has occurred.
Lenders or creditors are required to issue Form 1099-C, Cancellation of Debt, if they cancel a debt owed to them of $600 or more. Generally, an individual taxpayer must include all canceled amounts (even if less than $600) on the Other Income line of Form 1040.

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