Have 1099-C's for cancelled credit card debt. negotiated with creditors & settled. The forgiven amount now is Income! Must i report 100% this year?

[JumpinJohnny31]

it totals almost $20,000 and now I owe Fed/State tax over $5,000... this defeats the purpose of the forgiven debt!!!!

[Bsch4477]

Yes, you must report for the year you received it. 

[JumpinJohnny31]

Is there a chance to use form 982 to exclude from income?

[Anonymous_]

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@JumpinJohnny31 wrote:
it totals almost $20,000 and now I owe Fed/State tax over $5,000... this defeats the purpose of the forgiven debt!!!!

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How does it defeat the purpose?

You owe $5,000 to the IRS now rather than $20,000 to the creditor, which means you saved yourself $15,000.

[Anonymous_]

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@JumpinJohnny31 wrote:

Is there a chance to use form 982 to exclude from income?

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Yes, if you are insolvent.

See https://turbotax.intuit.com/tax-tips/debt/guide-to-debt-cancellation-and-your-taxes/L9YsOVhgB

[Mike9241]

you may be able to exclude some or all from taxability.  however you have provided no info so the ability to help you is limited. IRC 108 provides a means to reduce the taxable amount by reducing tax attributes. whether this applies to you is unknown.  see form 982 and instructions as well as PUB 4681

https://www.irs.gov/forms-pubs/about-form-982 

Generally, the amount by which you
benefit from the discharge of
indebtedness is included in your gross

income. However, under certain
circumstances described in section 108,
you can exclude the amount of discharged
indebtedness from your gross income.
You must file Form 982 to report the
exclusion and the reduction of certain tax
attributes either dollar for dollar or 331/3
cents per dollar (as explained later) in the instructions

https://www.irs.gov/forms-pubs/about-publication-4681