A friend of mine had received a 1099-c for both 2006 and 2007 stemming from the foreclosure of a home, one year for the first mortgage and the second year from the second mortgage,does the 1099-c have to be shown as income? This prevents her from being eligible for a eic

In case of foreclosure, there are two tax activities:
1. Reporting sale on schedule D
2. Reporting debt cancellation as income.

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt of recourse loan on their principal residence. Read about foreclosure or repossession Your U.S. Tax Return: Foreclosure or Repossession of Main Home (http://taxipay.blogspot.com/2008/08/foreclosure-or-repossession-of-main.html)

Yes, the income from the Form 1099-C can preclude her from claiming the Earned Income Credit for 2008.