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Student Debt Cancellation NOT Taxable?

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    Student Debt Cancellation NOT Taxable?

    About a year after my discharge, I cut a deal with my student loan holder to pay the loans off in total in exchange for a discount. They gave me about $4,000 off of the balance. I am pretty sure the settlement letter stated that I'd be getting a 1099-C because the canceled part of the debt was taxable income.

    I've been waiting to get my 1099-C in the mail. Today, I signed into my old student loan account, clicked the "get your tax form" button. Instead of a 1099-C, there was a Notice saying, "Since the amount of cancelled debt does not exceed IRS reporting thresholds, we provide this notice in lieu of a 1099-C." This was news to me.

    I tried finding what the IRS reporting threshold is. No luck. Does this sound right to anyone?

    #2
    Originally posted by benton88 View Post
    About a year after my discharge, I cut a deal with my student loan holder to pay the loans off in total in exchange for a discount. They gave me about $4,000 off of the balance. I am pretty sure the settlement letter stated that I'd be getting a 1099-C because the canceled part of the debt was taxable income.

    I've been waiting to get my 1099-C in the mail. Today, I signed into my old student loan account, clicked the "get your tax form" button. Instead of a 1099-C, there was a Notice saying, "Since the amount of cancelled debt does not exceed IRS reporting thresholds, we provide this notice in lieu of a 1099-C." This was news to me.

    I tried finding what the IRS reporting threshold is. No luck. Does this sound right to anyone?
    Not being a CPA, I could not answer officially. It may not be so, but it sure sounds good to me. I'd say relax and congratulations. Go by their word and print all that you can. OR, spend some $ on a CPA for the truth. Grats in any case. 'Hub
    If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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