Tax Year Prior to 2020: 1099-c

[Anonymous]

I received a 1099-c, cancellation of debt, for my LLC.  I'm not sure where I enter the info in my Business return?

[VictorW9]

If your debt is cancelled or forgiven, you'll receive Form 1099-C (Cancellation of Debt). Most of the time, cancelled debt is taxable, but there are exclusions and exceptions. We'll check for those after you've entered your 1099-C.

To enter your Form 1099-C in TurboTax, please follow the steps below: 

• Sign in to TurboTax (if you're not already signed in).
• Click on the Take me to my Return button
• Click on the Federal Taxes tab
• Click on the Wages and Income tab
• Scroll down to Less Common Income
• Click Start on Miscellaneous Income, 1099-A, 1099-C 
• Click Start on Cancellation of debt (Form 1099-C) and continue through the Interview questions.

Note: If you received a 1099-C for your main home and another 1099-C for something else (credit card, car loan, second mortgage, etc.) you won't be able to use TurboTax, as the interview doesn't support this.

[ldh878]

This answer is not correct for TurboTax for Business 2019, which is what the question referred to.  Selecting "Less Common Income" does not lead to anything marked "miscellaneous income"  or any way to get to a 1099-C form. 

The Help feature tells you to search for "1099-C" and then select the "Jump to" link, but TTB unlike TT for individuals does not offer a "Jump to" link.

This is a flaw that TurboTax should fix. 

[DaveF1006]

if you are in Turbo Tax Business:

1. Go to federal taxes
2. income 
3. other income
4. All other income start
5. At the bottom of the screen, type in a description and amount

[T-and-C-in-MI]

This needs to be more clear for people.  We have home and business tax SW but the 1099-C was received specifically for the LLC and has the name of the business on it.  There should be a spot for a  business' 1099-C in the business section.  The business section only shows a 1099-MISC or 1099-NEC.

[Irene2805]

Since the 1099-C was issued to your business, the amount of debt cancelled should be reported on Schedule C, line 6.  [Pub. 4681 - Canceled Debts, Foreclosures, Repossessions, and Abandonments]

To do this please follow these steps:

1. Click on the Business tab  > Continue > I'll choose what I work on
2. On the Let's gather your [business] info screen, click the Start/Update button next to Business Income and Expenses.
3. On the screen, Let’s gather your business info, in the Business Income and Expenses (Schedule C) section, click the Start/Update button. 
4. Continue to the Here's the business info we have so far screen.  Click on the Edit box next to the business. 
5. On the Your [XX] Business screen, click the Update box next to Business Income.
6. Click the Start/Update box next to Other Income.
7. On the Other Income screen, enter "cancellation of debt" in the Description box and the Amount.  Click Continue.
8. The amount will flow to line 6 of your Schedule C.

Be sure to delete the Cancellation of Debt Form 1099-C you entered.  To do this:

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar. 
2. In the Forms in My Return list on the left, click on Form 1099-C.  It will open on the screen on the right.
3. Click on the Delete Form box at the bottom of the screen.
4. To return to the interview, click on the Step-By-Step icon in the top right of the blue bar.  

[T-and-C-in-MI]

Thanks,

Actually, I never entered the 1099-C in the personal income section, so nothing to delete there.  Thank you for confirming what I thought.  I already did what you suggested by entering the 1099-C into the Other Income of Business Income section and input a description of "1099-C - Business loan discharge".  Thanks again for the quick reply and explanation.

[Nycbrian1]

Thanks for clarifying this.   That is where I thought it should go but was not sure. 

Question - If the 1099-C is in the name of a corporation, and the corporation is owned by an estate. Can the forgiven debt be recorded against the estate's taxes.  Because of this 1099-C the corporation now owes $13k, the estate only has $5k.  This was the estate would become insolvent. - Or would the assests of the corp

now come into play?

Thanks

Brian 

[HopeS]

The Form 1099-C should be included in the return that the Form 1099-C was issued.  

See IRS guidance below:

Form 1099-C

Additional information:

Form 1099-C

@Nycbrian1