So for 2021 I had forgiven credit card debt and have completed Form 982 for insolvency. As I'm finishing everything up when I completed the federal review and "audit risk meter", the program highlighted the form and it says, "...it is important to provide sufficient information concerning the debt cancellation with your return. In the case of insolvency, documentation showing the insolvency calculation must be attached to the return."
How do I attach the documentation? I found some general guidance online about submitting the worksheet and a brief narrative explanation of the situation, but I can't figure out how to create that in TurboTax.
You are correct. In TurboTax desktop versions you can create/complete the forms/worksheets/summaries, but the statement is outside of TurboTax. You will need to print/mail in the return along with statement describing the situation and explaining the calculations used to exclude the income.
Thanks.. So if I already efiled my return and attached the worksheets, if I have to submit a letter describing it, does that mean I should file some sort of amended return and include the letter with the 982 form to ensure everything gets matched up correctly?
That’s correct.
See the third paragraph under When To File in the Instructions for Form 982 (Rev. December 2021) for more information.