I need to file a Form 982 for a forgiven student loan which was for my son's education who passed away in 2017.

Cancelled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception.

Normally the debt is reported on Form 1099-C. Make sure you enter your 1099-C in TurboTax even if it qualifies for an exclusion or an exception.

Exclusions

• Cancellation of qualified principal residence indebtedness, better known as mortgage debt relief;
• Debt cancelled in a Title 11 bankruptcy;
• Debt cancelled during insolvency (the amount exceeding your assets);
• Cancellation of qualified farm or real property indebtedness.

If the debt qualifies for any of these exclusions, TurboTax will complete Form 982 and include it with your return.

Exceptions

• Certain qualified student loans;
• Money excluded from income by law, such as gifts or bequests;
• Cancelled debt that if paid by a cash-basis taxpayer would otherwise be deductible;
• A qualified purchase price reduction given by a seller;
• Any Pay-for-Performance Success Payments that reduce the principal balance of your mortgage under the Home Affordable Modification Program.

Tip: If your creditor is still trying to collect on your debt, it's not considered cancelled, forgiven, or discharged. There is no taxable income to report, not even if you got a 1099-C from the creditor.

Related Information:

• What qualifies for mortgage forgiveness debt relief?
• How do I enter a 1099-C?
• Can I exclude my 1099-C from my taxable income?

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Answered by TurboTax FAQ to this question