Consumer complaint received 2025-01-01 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Incorrect information on your report — Account information incorrect
Company: CAPITAL ONE FINANCIAL CORPORATION
State: IL

Complaint narrative:
According to Topic no. 431, Canceled debt Is it taxable or not? ( by the IRS ) If you borrow money and are legally obligated to repay a fixed or determinable amount at a future date, you have a debt. You may be personally liable for a debt or may own a property that secures a debt for which you may or may not also be personally liable.

If your debt is forgiven or discharged for less than the full amount owed, the debt is considered canceled for the forgiven or discharged amount that you no longer need to pay. Cancellation of a debt may occur if the creditor can't collect, or gives up on collecting, the amount you're obligated to pay. If you own property securing a debt, cancellation of the debt may occur due to foreclosure, repossession, voluntary transfer of the property to the lender, aband
onment of the property, or a mortgage modification.

In general, if your debt is canceled, forgiven, or discharged for less than the amount owed, the amount of the canceled debt is taxable. If taxable, you must report the canceled debt on your tax return for the year in which the cancellation occurred. However, the law provides several exceptions in which the discharged amoun
t is not considered canceled debt. These exceptions will be discussed later.

After a debt is canceled, the creditor may send you a Form 1099-C, Cancellation of Debt showing the amount canceled and date of cancellation. Contact the creditor if you receive a 1099-C reflecting incorrect information. If a creditor continues to attempt to collect the debt after you receive a 1099-C, the debt may not have been canceled and you may not have income from a canceled debt. Verify your specific situation with the creditor. Your responsibility to report the correct taxable amount of canceled debt as income on your tax return for the year in which the cancellation occurred remains, regardless of the accuracy of the Form 1099-C you received.

In general, you must report any taxable amount of a canceled debt as ordinary income on Form 1040, U.S. Individual Income Tax Return, Form 1040-SR, U.S. Tax Return for Seniors or F
orm 1040-NR, U.S. Nonresident Alien Income Tax Return ( attach Schedule 1 ( Form 1040 ), Additional Income and Adjustments to Income PDF ) if the debt is a nonbusiness debt, or on an applicable schedule if the debt is a business debt. See Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments ( for Individuals ). 

Caution : If your debt is secured by property, and the creditor takes that property in full or partial satisfaction of your debt, you are treated as having sold that property to the creditor. The tax treatment of the deemed sale depends on whether you were personally liable for the debt ( recourse debt ) or not personally liable for the debt ( nonrecourse debt ). 

For recourse debt, your amount realized on the sale is the fair market value ( FMV ) of the property. The difference between FMV and your adjusted basis ( usually your cost ) will be a gain or loss on the disposition of the property. Your ordinary income from the cancellation of the debt is the amount by which the discharged debt exceeds the FMV of the property. Include this cancellation of debt in gross income unless an exception or exclusion, discussed below, applies.

For nonrecourse debt, your amount realized is the entire amount of the nonrecourse debt, plus the amount of cash and the FMV of any non-cash property you received. You will not have ordinary income resulting from debt cancellation. 

The examples below show the difference between how recourse and nonrecourse debt is treated. 

You bought a boat for business use for {$20000.00}, paying {$2000.00} down and signing a recourse note for {$18000.00}. After paying down {$4000.00} on the note, you are no longer able to make payments. The boat dealer repossesses the boat, which is now worth {$11000.00}, and cancels the remaining balance ( {$3000.00} ). Your adjusted basis in the boat is now {$10000.00} due to allowable depreciation deductions of {$10000.00}. You will have ordinary income from cancellation of debt of {$3000.00} ( {$14000.00} remaining debt owed minus {$11000.00} FMV of boat ). You will have {$1000.00} of gain on disposition of the boat, the excess of the boat 's FMV of {$11000.00} ( the amount you realized on repossession ) over your {$10000.00} adjusted basis in the boat. 
The facts are the same except that you signed a nonrecourse note when buying the boat. When the dealer repossesses the boat, you will have gain of {$4000.00}, the difference between the {$14000.00} realized ( the face amount of the remaining debt ) and your {$10000.00} adjusted basis in the boat. You have no ordinary income from cancellation of the debt. 
See Publication 4681 for detailed information on canceled debt and on reporting a gain or loss from repossession, foreclosure, or abandonment of property. See also Publication 544, Sales and Other Dispositions of Assets and Publication 523, Selling Your Home.

Amounts that meet the requirements for any of the following exceptions aren't cancellation of debt income. 

A charge is considered income and I never received a 1099c from capital one

Company response to consumer: Closed with explanation