After you file

To report an insolvency to the IRS and exclude canceled debt from taxable income, you would file Form 982 (Reduction of Tax Due to Discharge of Indebtedness) with your tax return. 

TurboTax supports IRS Form 982, which allows you to exclude canceled debt (1099-C) from income for insolvency.  

You can get to Form 982 in TurboTax by:

1.  Click on "Search" in the upper right of your TurboTax screen.
2. Type "Form 982" in the search bar
3. Click on the link "Jump to Form 982"
4. Answer the follow-up questions regarding your discharged debt to determine if it is excludable.

Your discharged debt was likely reported to you on a Form 1099-C. 

You will enter your Form 1099-C in TurboTax under "Less Common Income."

You can easily get to these screens in TurboTax by:

1. Click on "Search" in the upper right of your TurboTax screen.
2. Type "Form 1099-C" in the search bar
3. Click on the link "Jump to Form 1099-C"
4. Answer the follow-up questions regarding your discharged debt to determine if it is excludable.

Click here for How do I enter a 1099-C?

Click here for Guide to Debt Cancellation and Your Taxes

Click here for Instructions for Form 982 

Click here for Form 982.

Please return to Community if you have any additional information or questions and we would be happy to help.