Consumer Bankruptcy Law and Practice: 15.5.5.6 Tax Consequences of the Discharge
The law is clear that, generally speaking, the discharge of a debt in bankruptcy, unlike most other types of discharge of indebtedness without payment, is excludable from gross income for tax purposes.1035 Nonetheless, some creditors believe that they are required to send a bankruptcy debtor a 1099 Form when a debt is discharged in bankruptcy.1036 Although this problem may eventually disappear as a result of clarifying tax regulations,1037 an