How do I report a discharged debt on Form 982?
Enter this information in the 99C screen. If the amount is a discharged debt that is excludable from gross income, it should also be reported on Form 982. In that case, select 982 from the For box drop list on the 99C screen, and also complete the 982 screen.
What is Form 982?
This is the Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. At the top of Form 982, you’ll find a series of check boxes that indicated why you are filling out this form. Unless your debt forgiveness falls into a defined category, line 1b may help relieve you of your tax burden.
What is a 1099-C cancellation of debt form?
If you received a 1099-C Cancellation of Debt form, it means that the creditor (the person or company to whom you owed money) has canceled or forgiven your debt. The creditor will file a 1099-C form that reports the amount of canceled debt to the Internal Revenue Service (IRS), and it is considered income.