Surprise! Forgiven Debt May Be Taxable Income
March 15, 2013 at 08:52 AM EDT
Settled debt may slip your mind when counting up your 2012 income. But it likely won't escape a creditor or debt collector who agreed to reduce the balance you owed by $600 or more: they'll report that to the IRS by filing a form 1099-C and send you a copy.
