Need to fill out Form 982. Received a 1099-C listed as a discharge in Bankruptcy. The bankruptcy was discharged 15 years ago. The amount on the 1099-C is more than my 2011 bankruptcy amount.

[user17745997975]

My Bankruptcy was discharged in 2011. I received a 1099-C for 2025 

I need to fill out Form 982. I received a 1099-C listed as a Cancelation of Debt. The bankruptcy was actually discharged 15 years ago which included them. 

The amount on the 1099-C is $2,000 more than my 2011 bankruptcy amount listed for this old timeshare debt.

• I'm using TT Deluxe. When I fill out Form 982, do I use the 1099-C amount?
• Do I need to mail proof of my 2011 Bankruptcy papers with the lower $6,000 that doesn't match, or only need to send the first few pages as proof of the Ch. 7 Bankruptcy discharge?  Then put the current amount from the 1099-C which says "Cancelation of Debt." Box 6 has "A" for Bankruptcy. Box 7 has the additional $2,000 as FMV of property in the discharge. 
• When I got to this point in TT, it listed the 1099-C as income. How do I fill out form 982 to reduce it from my income and do I need to provide proof?

Thank you very much for your help. 

[DianeW777]

Yes, you will use the amount on your 1099-C to complete Form 982. IRS Form 982 is used to exclude canceled debt (reported on Form 1099-C) from your taxable income, typically due to bankruptcy or insolvency. It must be filed with your Form 1040 to report the reduction of tax attributes (like basis in property). This form is accepted through e-file and you should use TurboTax Desktop. 

• How do I report excludable (non-taxable) cancelled debt?

Be prepared to include your 2011 bankruptcy documents to show that it was part of a bankruptcy. Follow the instructions and use the following publication for assistance to see if you were insolvent when the bankruptcy occurred.

• Insolvency-IRS Publication 4681
• How to switch from online TurboTax to the TurboTax software? 

It's an area that may require a tax expert for assistance.

[user17745997975]

Thank you very much for a concise understandable answer. The one trusted CPA through a friend was too busy to do our taxes with this one issue and said it's pretty simple since this BK case was closed.

• One question, which you answered, is using the amount on the 1099-C for the reduction. It is $2,000 more than the amount listed in my bankruptcy due to FMV. The 1099-C canceling the debt will match using that amount, but my proof will be $2000 less. Will that cause a discrepancy?
• Will I be uploading all of the Bk pages of proof of the Judge's closing this, and Insolvency to TT.  I would need to copy those amounts to the insolvency worksheet. I have no idea from 15 years ago! Am I able to mail the return?
• I'll Download TT Premier Desktop.
• One State Tax filingquestion: The software says it has a State Tax included, although I only visited that State for a week. I can include that?
• Again, thank you so much!

[DianeW777]

The answers to your questions are listed below in the order you entered them.

1. Generally you use the fair market value of your assets at the time the debt was discharged (new value), not the original cost or value. 
2. Yes, you should mail the return with the required documents. Be sure to keep all copies in your own tax file as well should you need them later.
3. This would apply to your own state return and not a nonresident state. You may need to check with the state that was a nonresident state to see if they conform/follow federal rules for bankruptcy income. All states may follow the same protocol for bankruptcy income. 
   • If you mean you have state withholding then you would need to add that to your return so that you can get a refund if applicable. You may need to clarify this a little more.

@user17745997975