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rwest31
New Member

Got a 1099c for a discharged credit card through bankruptcy title 11 i 2002 or 3.

filed bankruptcy in 2003 for this and was discharged
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3 Replies

Got a 1099c for a discharged credit card through bankruptcy title 11 i 2002 or 3.

Based on what you're describing, it sounds as though this debt may be nontaxable.

However, see the TurboTax Help article How do I report excludable (non-taxable) canceled debt? for more information, and for guidance on how to deal with this in the TurboTax program.

Got a 1099c for a discharged credit card through bankruptcy title 11 i 2002 or 3.

The 1099-C was issued because you had forgiveness of debt. You MUST file Form 982 with your return in order to let the IRS know that it is not taxable because you were insolvent. IRC 108 says that when a taxpayer is insolvent any Cancellation of Debt is NOT taxable to the extent they were insolvent. The instructions to Form 982 have good information for you to use.

The bottom line is if before your bankruptcy was discharged you had MORE liabilities (debt) than you had FMV of assets - then you were insolvent. Keep any paperwork you use to compute whether you were insolvent or not because the irs might ask you to supply them. Remember, compute the insolvency right before the B/Ruptcy was final and your debt was forgiven.

If you were NOT insolvent then you will have to claim the amount as income. 

DaveF1006
Employee Tax Expert

Got a 1099c for a discharged credit card through bankruptcy title 11 i 2002 or 3.

It depends. Please review this Turbo Tax article on how to file Form 982.  CSKcpa56 has provided sound advice as well as JohnW152. To file this form, you will need a Turbo Tax product download to proceed because Turbo Tax online does not give you an opportunity to enter information on the forms themselves.

 

@rwest31 

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