Forgiven debt still leaves you on the hook for taxes

TULSA - Tracy found out when a hospital accepted a lower amount to settle a $30,000 medical bill.

She says   "I offered to make an $8,500 payment and the hospital accepted it as payment in full.  Now I've received  a 1099-C tax form."

Even though it's been written off that debt is taxed like income generally as long as the canceled debt is $600 or more.

There are a few exceptions including if you've been through bankruptcy or had your home foreclosed on.

Regardless of the type of debt it's well worth talking to a CPA or tax attorney to be certain you're not paying too much or getting yourself in trouble with the IRS.