How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Jesse Handel Your Own Question

Jesse Handel
Jesse Handel, Tax Preparer
Category: Tax
Satisfied Customers: 264
Experience:  7 years tax preparation. IRS Registered Tax Preparer.
9660727
Type Your Tax Question Here...
Jesse Handel is online now
A new question is answered every 9 seconds

I received 1099C for 44,893 student loans

Resolved Question:

I received 1099C for 44,893.71 for federal student loans that were cancelled because of permanent diability. How do I fill out the 982 form? I also received a letter from Nelnet that says I am on a three year post discharge monitoring, my discharge date was 9/13/2012

Submitted: 1 year ago.
Category: Tax
Expert:  Jesse Handel replied 1 year ago.
Hello and thank you for coming to our website. We appreciate the opportunity to help you with your questions. Your situation isn't covered by Form 982. IRS Publication 4681 "Canceled Debts, Foreclosures, Repossessions, and Abandonments" covers your exact situation under "Exceptions" on page 4 of the 2012 version. You can read the publication at this web address Pub 4681. This publications explains that your forgiven debt isn't taxable income, but doesn't include any information for reporting the situation on your tax return. I would recommend that you don't include the canceled debt on your federal tax return, but that you include a written statement explaining the cancellation of debt was due to disability and a nontaxable event per Publication 4681 exception for student loans. Put your name and social security number on the upper right hand corner of the page and send it with your federal tax return. If you are filing by mail, just type the statement and add it to the return. If you are using tax software, they should have a provision for adding a statement to the IRS with your electronically filed tax return. If you go to a tax preparation office, their software will have to ability to include a statement with the e-filed federal return.

Since this situation is an identified situation in an IRS publication, the IRS should be able to recognize the situation as a nontaxable cancellation of debt without help, but adding a statement to that effect will call it to their attention and make sure that they don't miss the exception.

I hope this answers your question. Please let me know if you need further information or if I can provide any additional help with this question. There is a possibility that this cancellation of debt may slow down your refund (if you are going to receive one). Unfortunately, any time that there any kind of unusual situation, there is the possibility that your return will be looked at more closely than usual and that additional scrutiny can slow down the processing of any refund.
Jesse Handel, Tax Preparer
Category: Tax
Satisfied Customers: 264
Experience: 7 years tax preparation. IRS Registered Tax Preparer.
Jesse Handel and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thanks for your help. The representative from Nelnet said I should fill out firm 982 that why I ask how to file this form. I will do as you suggested and add a statement to my return. Should I just explain that I received the 1099C and why I'm excluding it from my income?
Expert:  Jesse Handel replied 1 year ago.
Yes. If there is a code on the 1099-C, that may explain the situation to the IRS directly from their copy of the 1099-C. On the back of the 1099-C form, there is a list of codes and what they mean. In your statement, you also want to cite the student loan exclusion from Publication 4681. You probably want to include a copy of the statement in your Louisiana state taxes and state that it is a copy of the statement sent to the IRS, if you have to file in Louisiana.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.