Hi Everyone:
I had several 1099-C (s) issued in 2020, approximately 11. When the pandemic hit, I had to make quick negotiations to get out from under a pile of debt to survive. I now need to record these on TT, and complete my Insolvency Worksheet.
I understand what will be involved as far as getting figures for household items, car, etc., But here is where I could use some guidance:
- At the exact time of debt forgiveness, I had not filed my 2018 and 2019 taxes (both had taxes due.) They were officially filed though late 2020. Do I include that tax liability on my worksheet, even though I had not filed yet, but it was a financial obligation?
- For the succession of Forms 982, my understanding is that I have to file a new form, and a new worksheet for every single 1099-C. There doesn't seem to be a shortcut to this, right? However, in principle, would I be able to do this: Example: if my liabilities were $60K in March, and $4K forgiven in March, then would I start the next Form 982 in April with the new liability amount of $56K, and also just modify specific entries on the insolvency worksheet, which would probably be credit card liability, or would I need to go through the entire insolvency worksheet, and all the way down the list, pulling my electric account, and water bill, etc. If so, can you think of an easier way for me to do this? Should I leave the electric, water, etc. off if I qualify for insolvency without these smaller items? I was extremely insolvent, if it turns out that I do add in the taxes unfiled at that point. (They are all filed now.)
- Do I send every insolvency worksheet via TT, or will it not let me, and if that is the case can I just keep on file?
I realize this post is long, so thank you for reading it, and all opinions/strategies welcome on how to keep this accurate, but also efficient.
Thank you!
