You get a 1099-C for Cancelled, forgiven, and discharged debt which is considered taxable income, unless it qualifies for an exclusion or an exception. Your Chapter 11 bankruptcy falls under what is considered an exclusion. You will still need to enter your 1099-C in TurboTax even if it qualifies for an exclusion or an exception. You can find more details on this here https://ttlc.intuit.com/questions/1899870
You can't use the Online version to claim the exclusion. You'll need the download or CD version of TurboTax to do this and access Form 982 so that you can notate your bankruptcy. So follow the exact steps here below, provided by TurboTaxMichaelDC, and that will help you get this taken care of.
NOTE: If you started your 2016 return in TurboTax Online and want to switch to the TurboTax download/cd version, click here. And if already paid for TurboTax online, contact our support representative ; otherwise proceed with the desktop purchase.
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);
If the debt qualifies for any of these exclusions, TurboTax will complete Form 982 and include it with your return.
https://ttlc.intuit.com/replies/5709022
[edited 2/7/17 at 8:17am]
