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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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I am filling out Form 982 - Insolvency as a result of

Customer Question

I am filling out Form 982 - Insolvency as a result of receiving a 1099-C from a credit card creditor. I need to know what line items need to be included and if I need to attach any supporting documents, such as the Insolvency Worksheet?
Submitted: 7 months ago.
Category: Tax
Expert:  Lev replied 7 months ago.
When you prepare your Insolvency Worksheet - you need to determine if you were insolvent.The worksheet may be found on page 8 in this publication -http://www.irs.gov/pub/irs-pdf/p4681.pdfYou list all your assets and all liabilities - on the day before the loan was forgiven - so include that loan into the worksheet.This worksheet is not sent with your tax return - just keep it for your record.Do not send any supporting documents and do not send that Insolvency Worksheet - to the IRS - just keep for your record.On that Insolvency Worksheet - you do not list your income - but you list the value of assets..If you are insolvent - the amount of exclusion is reported on 982 line 2 and is NOT reported as taxable on 1040. That exclusion is claimed on form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness and that form 982 should be included into her tax return.- check the box 1(b) and list excluded amount on line 2Here is the form -www.irs.gov/pub/irs-pdf/f982.pdfMost likely - you do not need to Reduce any of Tax Attributes - but look on lines 4-13 - if you have any?

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