Why cancellation of debt counts as taxable income

Name: Why cancellation of debt counts as taxable income
Uploaded: 2026-08-06T19:08:31.183Z
Duration: 67 s
Description: When a creditor cancels your debt, you already received the goods, so the IRS treats the forgiven amount as income.

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Had a debt canceled and wondering if you really owe taxes on it? TJ explains the logic behind why the IRS treats forgiven debt as income—and what can happen if you decide to just ignore that 1099-C. Worth understanding before you file.

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