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Marvin,EA
Marvin,EA, Enrolled Agent
Category: Tax
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Experience:  Enrolled to Represent Taxpayers Before The IRS
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Can I do the debt cancellation 982 form by myself or do I need

Customer Question

Can I do the debt cancellation 982 form by myself or do I need to hire a CPA?
Submitted: 5 years ago.
Category: Tax
Expert:  Marvin,EA replied 5 years ago.
Hello and thank you for using Just Answer. You can fill out the form yourself. Did you received a 1099-C or 1099-A?
Customer: replied 5 years ago.
I received a 1099-C

My debt negotiator said he would help but I am not getting a return call...
that is another issue!
Expert:  Marvin,EA replied 5 years ago.

You would need to determent your insolvency. Your fair market value of your total assets immediately before the discharge of the debt and your fair market value of your total debt immediately befor discharge. That would be your total insolvency.

 

Example: The 1099-C you received is $10,000. Your fair market value of your total assets is $12,000. Your total liabilities is $25,000. You are insolvent to the extent of $13,000 (25,000 - 12,000 = 13,000) and can have the $10,000 discharge.

 

If you have your taxes done by a tax services, download Form 982 (www.irs.gov/pub/irs-pdf/f982.pdf) In Part I check block b (discharge of indebtedness to the extent insolvent not in a title 11 case) and on line 2 enter the total amount of your insolvency (amount can't be over 1099-C amount). Give the form to the tax preparer with the 1099-C to go with your 1040. The Form 982 can be efile.

Customer: replied 5 years ago.
Do I have to send the IRS a letter stating that I do not "own" my home as in
not paid off , or my car and I have no savings. Do they want to know if
I own a couch, a watch, a TV...? I prefer to do this myself if possible
Expert:  Marvin,EA replied 5 years ago.
No, the only forms you have to send to the IRS is Form 982 with your Form 1040. You should keep records (bank statements, other statements) to prove the deduction if you are audited by the IRS. If the 1099-C is for tax year 2008 Form 982 should be sent with your Form 1040 for 2008.
Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1663
Experience: Enrolled to Represent Taxpayers Before The IRS
Marvin,EA and other Tax Specialists are ready to help you
Customer: replied 5 years ago.
I still need help with form 982
Customer: replied 5 years ago.

I have 12000 in forgiven debt. I have a few hundred in savings. Owned a home in 2007 with my ex husband. Car not paid off. Still owe about 30,000 in debt.

 

The original advice given to me from you was to put the amount of insolvency on line 2 of form 982. Shouldn't the 12,000 go on that line?

 

 

 

 

Expert:  Marvin,EA replied 5 years ago.
How much is the Form 1099-C?
Customer: replied 5 years ago.
Thanks , but I just decided to take this to a cpa...too scared...

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