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1099c cancellation debt bankruptcy

I received a 1099c from a cancellation of debt from a farm business bankruptcy.  Is there anyway I can still enter that with turbo tax?
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1099c cancellation debt bankruptcy

https://ttlc.intuit.com/replies/5107826

Even if you receive a Form 1099-C from a lender, you still may be able to avoid taxation on the forgiveness of a debt. If your debt was discharged in a Title 11 bankruptcy proceeding, such as a Chapter 7 or Chapter 13 case, you're not responsible for taxes on that debt.

If you can demonstrate to the IRS that you were insolvent at the time the debt was cancelled, you can similarly avoid taxes on that debt. Certain other types of debt, including qualified farm indebtedness and qualified real property business indebtedness, can also avoid taxation in the event of cancellation.

The 1099-C you received must be reported on your tax return.  A copy of 1099-C that you received will also be reported to the IRS and therefore you are required to file it on your income tax return.  Otherwise you will receive a letter from the IRS about not reporting the 1099-C. However, If you can demonstrate to the IRS that you were insolvent (unable to pay debts owed) at the time the debt was cancelled, you can similarly avoid taxes on that debt. But you still MUST report it on your tax return. (see instructions below on how to enter your 1099-C)

We generally recommend using the CD/Download version of TurboTax Deluxe or a higher edition. I notice that you are currently using our TurboTax online product. If you have not paid anything yet, you can easily cancel and change to the desktop version for your return.

Borrowers who exclude the discharge of indebtedness income must report both the amount of the income and any resulting reduction in basis or tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).

https://ttlc.intuit.com/replies/3300673

https://ttlc.intuit.com/replies/3301892

1 Reply
Level 1

1099c cancellation debt bankruptcy

https://ttlc.intuit.com/replies/5107826

Even if you receive a Form 1099-C from a lender, you still may be able to avoid taxation on the forgiveness of a debt. If your debt was discharged in a Title 11 bankruptcy proceeding, such as a Chapter 7 or Chapter 13 case, you're not responsible for taxes on that debt.

If you can demonstrate to the IRS that you were insolvent at the time the debt was cancelled, you can similarly avoid taxes on that debt. Certain other types of debt, including qualified farm indebtedness and qualified real property business indebtedness, can also avoid taxation in the event of cancellation.

The 1099-C you received must be reported on your tax return.  A copy of 1099-C that you received will also be reported to the IRS and therefore you are required to file it on your income tax return.  Otherwise you will receive a letter from the IRS about not reporting the 1099-C. However, If you can demonstrate to the IRS that you were insolvent (unable to pay debts owed) at the time the debt was cancelled, you can similarly avoid taxes on that debt. But you still MUST report it on your tax return. (see instructions below on how to enter your 1099-C)

We generally recommend using the CD/Download version of TurboTax Deluxe or a higher edition. I notice that you are currently using our TurboTax online product. If you have not paid anything yet, you can easily cancel and change to the desktop version for your return.

Borrowers who exclude the discharge of indebtedness income must report both the amount of the income and any resulting reduction in basis or tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).

https://ttlc.intuit.com/replies/3300673

https://ttlc.intuit.com/replies/3301892