Do I need to report on form 982 if I did not receive a 1099c?

[wilcox5]

I have cancellation of debt but I did not receive a 1099c from the credit card company.  Also, when I try to fill out form 982 Turbo tax is not letting me fill out Part 1b Discharge of indebtedness to the extent of insolvent.

[MargaretL]

No, you are not required to file Form 982 until you receive Form 1099-C reporting cancellation of debt. When you do receive 1099-C, report it with Form 982 then.

[Summertimehere81]

Margaret, how come TurboTax is telling me I need to fill out a 928 then when filing my return? I have not received a 1099-C, or anything remotely like it, and the ONLY debt I've had in the last 10 years was for an emergency room visit in which my State insurance lapsed, but when reinstated days later, was backdated and the cost covered. I have no clue what's going on... please help...

[AlexanderS08]

How is it that you are encountering the message asking you to complete the Form? You do not need to complete it if you have no 1099-C and if you accidentally created the Form and do not need it then you can delete the Form.

[smligon]

I’m sorry, but I don’t think this is correct. I did not receive a 1099c from 4 debtors - so didn’t claim the forgiven amount on my taxes. Two years later, I get a letter from the IRS that I owe a little more than $3600 because I didn’t claim the income. I tried to re-do the firm 982 with all information and they did not accept it. I had to pay. Even if you don’t get a 1099c I would claim the forgiven amount!!

[Critter-3]

The only way the IRS knows of the cancelled debt was if a 1099C was issued even if you did not get your copy.  Amend the return to add the form 982 if you were insolvent and allowed to use the form 982. 

[smligon]

Well evidently the IRS did receive a form 1099c, but I did not. Do the statement previously made about not needing to file the info if you didn’t receive a 1099c is incorrect. This year I am also claiming debt forgiveness (last year if this) and I’m claiming all income that was forgiven in 2022 whether I get a 1099c or not. Can’t afford to pay money back in two years. 

[Highseas11]

This is my very question if you do not receive one, but the IRS does then that could be a problem as to gentleman mentioned, so how does Won know whether or not they should fill out the form or not I have always e-filed I’ve never done it by mail, but how does one know whether they should or not

[LindaS5247]

Whether you need to report the debt forgiven may depend on what type of debt it was.

There are some exceptions to canceled debt that is reported on your tax return:

Canceled debt exceptions

One exception includes the debts you no longer have to repay because of a gift or a bequest made in a will. For example, suppose you borrow money from a friend and sign a promissory note. If your friend passes away and relieves you of your obligation to repay the loan in his will, the debt cancellation isn’t taxable.

A second exception applies to the cancellation of student loan debts resulting from your employment with a government agency or with an educational institution. And if your mortgage balance is reduced under a Home Affordable Modification Program, you don’t have to report it on your tax return.

Canceled debt exclusions

If your canceled debt doesn’t qualify for one of the exceptions, you should then determine if an exclusion applies to your situation. Exclusions commonly cover debts canceled on your primary residence, in a Chapters 7, 11 or 13 bankruptcy or other situations where you’re insolvent at the time the debt is canceled. You are insolvent if your total debt is more than the fair market value of your personal assets.

How to report

If you do not qualify for an exclusion or exception, your canceled debt is taxable and needs to be reported on the “other income” line of your tax return or on Schedule C if it relates to your sole proprietorship business. 

If you qualify for an exception or exclusion, you don’t report your canceled debt on your tax return. However, when using an exception and it relates to property that you own, you may need to file a Form 982 to reduce your tax basis, or cost, in the underlying property if the debt relates to your insolvency or bankruptcy. This reduction in basis can increase the taxable gain that you'll recognize when you sell the property.

Click here for additional information regarding cancellation of debt and your taxes.