Yes, you can use TurboTax to report cancelled debt and help determine if that debt can be excluded from your taxable income.
There are 4 steps to ensure that your income is excluded:
1. Enter Form 1099-C
2. Create the Insolvency Worksheet
3. Check entries on Canceled Debt Worksheet
4. Check Form 982
The following post describes the process in some detail. Importantly, it recommends that you use a Desktop (CD/Download) version of TurboTax Deluxe (or higher, like Home and Business). It will allow you easier access to the necessary forms and worksheets.
I have a 1099c for a cancelled debt. I want to file for insolvency. How do I do that?
