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.
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?