Form 1099-C; Cancellation of Debt & Form 1099-A; Acquisition or Abandonment of Secured Property

IMPORTANT: Form 1099-C and Form 1099-A are not available to add as a page. 


Depending on what the Form 1099-C; Cancellation of Debt income or Form 1099-A Acquisition or Abandonment of Secured Property is for will determine if this is taxable income or nontaxable income.


When Form 1099-C/Form 1099-A is Taxable Income



Add  "Additional Income Including Social Security Benefits" Page, and enter this income into "Other Income". 


There are two ways to add forms:


Option A: 
Select "Edit Return" on the Summary Page.

 
 

  Scroll through the list of supported Forms and Schedules and select "Additional Income Including Social Security Benefits."

 
  Then select "Add Forms".


Option B: 
Select "Income" from your list.

                     
  
This will expand your Income forms and schedules included in your return.

                                                  

Select "Add Income Form" to display all supported income forms available.



Select "Additional Income Including Social Security Benefits".

Nontaxable Income:


Any amount of the Form 1099-C/Form 1099-A that qualifies as nontaxable income either by an Exemption or Exception must be reported on Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness. 

Add Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness. (See option A above for how to add a form).


IMPORTANT:
  • When the entire amount of Form 1099-C/Form 1099-A is taxable, do not add Form 982. 

  • When the entire amount of Form 1099-C/Form 1099-A is nontaxable, do not enter as Other Income.

  • Form 1099-C/Form 1099-A with both taxable and nontaxable income, must have the applicable entered into both pages in the system.



CAUTION: Form 982 is a reporting form, not a calculating form. 


Total amount of Form 1099-C: 
Enter Form 1099-C total into this box. Do not allocate the taxable/nontaxable amount here. 
The taxable amount must be entered into Additional Income Including Social Security Benefits Page.
 


Part 1:

Check the box for the Exemption or Exclusion the Form 1099-C income qualifies for. Form 1099-C income is considered taxable 
for all other income not listed. If you are unsure how to treat this income, see IRS Form 982 Instructions.
 

IMPORTANT:
Make sure the correct box is checked. This can be very complex, depending on what the Form 1099-C income is from.



Explanation of Basis Reduction is required anytime 






Qualified Farm Indebtedness:

Do not enter any non-farm indebtedness in to any of first three boxes shown below.


If you have any adjustments to Passive Activity and/or the Foreign Tax Credit Carryover, you must calculate the amounts. 
The system does not do this for you. Remember to keep all adjustments made in your records.   

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