Basically, this comes down to the type of debt you incurred with the time share. If it is a non-recourse loan then the debt cancellation is not a taxable event and you simply would not include the 1099-C on your return. A non-recourse loan is secured by the property, the lender cannot come after you personally for the debt, all they can do is repossess the property. Be sure to keep proof that the debt was a non-recourse debt along with your 1099-C.
A recourse debt, can still be secured by the property, but the lender can then also come after you and sell your other assets to collect the remaining balance of the debt. If this was a recourse loan, then you would need to report the 1099-C on your return.
If the debt was discharged through bankruptcy or if you are insolvent, then you can exclude the 1099-C by filing form 982.
You would need the download version of TurboTax to fill out form 982. You will find it in forms mode by clicking Open Form then searching for form 982. It is not available in TurboTax Online.
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