Form 1099-C & Form 982 - Cancelled Debt Taxable Income Exclusions

Cancellation of debt income is taxable income for U.S. taxpayers. These amounts are reported on Form 1099-C and are generally included with a taxpayer's federal return. In some cases, a taxpayer may exclude the canceled debts from income.

In this example, we look at a taxpayer who meets the insolvency exception for excluding COD income from his taxable income. The taxpayer completes the insolvency worksheet and calculates the basis reduction to his assets.

2022 Example Form 982:    • IRS Form 1099-C Explained with Form 9...  
COD Income Taxable:    • Cancelled Debt Income is Taxable!  Us...  

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