About Form 1099-C

• Taxpayers could receive Form 1099-C if they had any debt cancelled in excess of $600 (may receive Form 1099-A if a property).

• Taxpayers who are not insolvent and whose debt is not in relation to a Title 11 bankruptcy MUST include the debt as income on their 1040.

• Taxpayers who are insolvent or whose debt is related to a Title 11 bankruptcy may be able to exclude the debt from income using Form 982. For more information reference What is Insolvency? and the IRS Form 982 instructions. 
  
  

Completing Form 1099-C (for taxpayer’s who are not insolvent by the full amount)

1. Select Add Form.

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2. Locate Form 1099-C in the All Forms & Schedules Menu. Double-click to add.
   
   

3. If a joint return, choose New Taxpayer's or New Spouse's Occurrence.
   
   

4. Complete the 1099-C, filling in all applicable sections.

   1. If the taxpayer is partially insolvent, enter the amount they are not insolvent by in box 2. If they are not insolvent at all, enter the full amount from the tax form.

       

5. Select To Form: in box 2.
   
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6. Select Choices.

7. Highlight and double-click SCH 1 Line 8 C to link the income.