The National Directory of Certified Public Accountants

Ask A CPA - Cancellation of Debt

Is My Cancellation Of Credit Card Debt Taxable?

If debt on your credit card was cancelled, you must report the cancelled amount as income on Form 1040 line 21 unless you were insolvent immediately before the cancellation or the cancellation occurred in a Title 11 bankruptcy case.

If you need professional help with "Cancellation of Debt" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.