How to enter insolvency on the amended taxes?

[azizahksalaam]

I'm trying to enter insolvency while entering my information under the 1099-C portion. Where and how do I enter the insolvency online?

[DaveF1006]

You can't enter this in TurboTax online because it does not include the insolvency worksheet directly in the interview. You would need to switch to a Desktop program to generate Form 982. 

In TurboTax Desktop, open the Forms Mode.

• Go to Forms
• Search for Form 982
• Check the box for “Discharge of indebtedness to the extent insolvent”
• Fill out the Insolvency Worksheet (lists assets vs. liabilities at the moment before the debt was canceled)

If you are interested in switching to the Desktop product, read this TurboTax article for complete instructions on how to do this.

[rjs]

The screen where you enter Form 1099-C in TurboTax says the following.

"Important info about your canceled debt...
In some situations, canceled debt can be excluded from taxable income. These situations might include bankruptcy or insolvency. If you think one of these exclusions apply to you, we recommend you have a tax pro review your situation."

As DaveF1006 said, if you use the TurboTax Desktop software, you can complete Form 982 and the Statement of Insolvency in forms mode, but there is essentially no help or guidance. You have to know what you're doing. That's why consulting a tax professional is recommended.