Exceptions to IRS Form 1099-C Reporting

Interest.  Interest need not be reported.  If it is reported as part of the cancelled debt, the IRS Form 1099-C instructions require that it be shown in a separate box on the form.

Non-principal amounts.  Cancellation of amounts other than stated principal, including penalties, fines, fees, and administrative costs charged to the Borrower BorrowerPerson who is the obligor per the Note. , need not be reported.

Release of a co-Borrower.  IRS Form 1099-C need not be filed when one Borrower BorrowerPerson who is the obligor per the Note. is released from a Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 as long as the remaining Borrowers BorrowersPerson who is the obligor per the Note. are liable for the full UPB UPBUnpaid Principal Balance of the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 .

Guarantor or surety.  A guarantor or surety (i.e., any Guarantor GuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. or Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. executing a Non-Recourse Guaranty Non-Recourse GuarantyGuaranty executed by a Key Principal on Form 4501 series or Form 6015 series, or approved by Fannie Mae. or a Payment Guaranty Payment GuarantyGuaranty executed by a Key Principal on Form 4502 series or Form 6020 series, or approved by Fannie Mae. ) is not a Borrower BorrowerPerson who is the obligor per the Note. for purposes of the debt cancellation reporting requirements, so IRS Form 1099-C is never required.