I had a loan go into default this year. What does this mean to me?

If a loan defaults, a 1099-R is issued on the entire remaining balance as taxable in the current year. In addition, the loan will remain as an outstanding defaulted loan on the contract and continue to accrue interest until the loan is paid off or the account is closed. The principal and the accrued interest from the last payment received until the default date are taxable.

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