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I have a 1099-c form how much does that affect my tax refu

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nd?...
I have a 1099-c form how much does that affect my tax refu nd?
Submitted: 7 years ago.Category: Tax
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Answered in 4 minutes by:
2/18/2010
Tax Professional: Merlo, Accountant replied 7 years ago
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Hello sady,

 

What type of debt was this that was canceled? Was this on a home loan or a credit card?

 

 

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Customer reply replied 7 years ago
It was a Bank of America credit card.
Tax Professional: Merlo, Accountant replied 7 years ago

Hello again sady,

 

The amount of the canceled debt reported on the form 1099-C is considered taxable income to you and must be reported on line 21 of your form 1040 as other income.

 

You may be able to exclude this from your taxable income if you can show that you were insolvent at the time this debt was canceled. That means showing that your liabilities were more than your assets.

 

To claim exclusion under the insolvency rules, you would need to complete form 982 and attach that to your tax return along with the worksheet provided with that form which shows how you proved your insolvency state.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you sady

 

 

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