It may seem like insult added to injury, but cancellation of debt, whether through foreclosure, repossession, or forgiveness of credit card, student loan, or other debt has the potential to create taxable income. This video tells you why this happens, and what you can do to possibly exclude cancellation of debt from taxable income. This video goes into a lot more detail about claiming the insolvency exclusion: https://youtu.be/cCUy8c2h3y4 Follow The Tax Geek on Twitter: @taxgeekusa Additional information and resources: IRS Publication 4681: "Cancelled debts, Foreclosures, Repossessions, and Abondonments": https://www.irs.gov/pub/irs-pdf/p4681.pdf IRS Form 1099C: "Cancellation of Debt": https://www.irs.gov/pub/irs-pdf/f1099c.pdf IRS Form 982: "Reduction of Tax Attributes due to Discharge of Indebtedness": https://www.irs.gov/pub/irs-pdf/f982.pdf credit.com: "What is a 1099-c Cancellation of Debt Form and How Does it Impact your Taxes?": https://www.credit.com/blog/1099-c-cancellation-of-debt/ Intro Music: "Bluesy Vibes" - Doug Maxwell - YouTube Audio Library Background and Outro Music: George Street Shuffle, Kevin McLeod, http://incompetech.com via YouTube Audio Library DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional. The tax information in this video is based on tax law and IRS regulations in place when this video was published, and is subject to the whims of Congress.