I received a 1099c for a student loan reduction. Does Turbo Tax give me a chance to apply for reduction of tax attributes with an IRS Form 982?

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    Generally, the amount by which you benefit from the cancellation of debt is included in your gross income. However, under certain circumstances, you can exclude the amount of debt cancellation from your gross income.

     

    Use Form 982 to report the exclusion of income from the cancellation of debt, and any related reductions of tax attributes.

     

    Because of the complexity of the “reduction of tax attribute” rules, TurboTax cannot include Form 982 in the step-by-step interview.

     

    If you are using the desktop version of TurboTax (download or CD-ROM), then you can access, via Forms Mode, the Canceled Debt Worksheet for your Form 1099-C. TurboTax will prepare Form 982 based on the Worksheet.

     

    Form 982 cannot be completed through TurboTax Online.

     

    More information is available at this link:

     

    http://turbotax.intuit.com/tax-tools/tax-tips/Home-Ownership/Tax-Relief-for-Cancelled-Mortgage-Debt/INF12033.html



    • At TT, they should add these instructions as a part of Turbo tax interview where they tell you to consult a tax professional. Based on this info, I was able to enter my 1099c for a cancelled HELOC an now I am ready to file my taxes.
    • Turbo Tax did suggest a tax pro. However, I elected to download the IRS worksheet, publication, and Form 982; I used the insolvency exception to reduce the amount of the cancelled debt, but I couldn't e-file since I had to add the 1099c and Form 982 to my 1040 package. Personally, I believe that TT could add the worksheet to their program because it wasn't that difficult, though time-consuming, to plow through the IRS pub, worksheet, and form.
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