How do I enter cancellation of debt amount for 1099 vendor? (1099-C)

1099s

If a vendor has a taxable debt of $600 or more that is canceled by your organization, your organization is required to file Form 1099-C with the IRS. Your organization is also required to send the vendor a copy of the 1099-C Cancellation of Debt form.

Entering cancellation of debt amount

1. Open Connect Accounts Payable > Government Reporting > 1099 Recipients.

2. Click the 1099-Cancel Debt tab.

1099-Cancel Debt tab

3. Enter the cancel debt information.

Date of identifiable event

It does not matter whether the actual cancellation is on or before the date of the identifiable event. Examples of an identifiable event include bankruptcy or any event that makes collecting the debt unenforceable. To learn more, see When Is a Debt Canceled in the 2021 Instructions for Forms 1099-A and 1099-C on the irs.gov website.

Debt discharged

Enter the amount to discharge.

Interest

Enter the interest accumulated on the debt.

Debt description

Enter a transaction description.

Debtor personally liable for repayment of debt

If the debtor was personally liable for repayment of the debt, select the checkbox.

Identifiable event code

Select the reason why the debt was cancelled.

Fair market value of property

Enter the fair market value of the property if a foreclosure or abandonment of property occurred in connection with the cancellation of the debt in the same calendar year.

Corrected

If you are filing the original 1099-C, do not select the checkbox. If you are filing an amended 1099-C, select the checkbox.

4. Click Save (CTRL+S).

202105, 2021Jan05