I have seen two people struggle with reporting CODI income 1099-C due to discharge of indebtedness in claiming the insolvency exception
using form 982 you claim insolvency
2 people in different turbo tax threads have stated that when they try to claim insolvency, the Federal amount goes to 0 as it should, but the state amount does not change and does not reflect the CODI insolvency exception
The states were California and massachusssets which both Definitely allow for cancellation due to insolvency in their state tax code (they follow IRC108 )
i would like you to please tell me why or how it would be possible that the state return was not adequately adjusted on the turbo tax software?
I am unaware if they were using a desktop version or not
regardless have you heard of this problem? The state tax return not updating the insolvency amount while the federal return does?
since you are an expert I would hope you will not say “we need more information sorry” please give me some sort of speculation from your experience
I trust that an expert will give me an expert response
please!
thank you
