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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10166
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Received a 1099c home equity loan. The loan was back by my

Customer Question

Received a 1099c for a home equity loan. The loan was back by my primary residence. The bank deposited the $100,000 directly into my account to use to make improvements on my home. A couple of years ago the loan got a little difficult to pay each month. After a modification on my 1st mortgage, the bank with the home equity loan offered to forgive the debt and I received a 1099c. Is the amount an exclusion from income or must I include it?
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.

Hi, No this is excludable, using for IRS form 982.

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Looks like you understand the requirements; secured by primary residence, and used to purchase or improve the home.

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Here's the form: https://www.irs.gov/pub/irs-pdf/f982.pdf

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Since you qualify under the primary residence exclusion (extended in the last congressional session), as opposed to the insolvency or the bankruptcy exclusion, all you need to do is check box 1(e) and writhe the amount from the 1099-C on line 2.

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Do not report the income on the return. Simply include the 982 with your filing to "answer" the 1099-C.

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I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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Otherwise, I won’t be credited for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Expert:  Lane replied 8 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

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Let me know…

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Thanks

Lane

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