Janitor Bob Posted February 21, 2021 Report Share Posted February 21, 2021 Client had $24,000 primary residence mortgage debt cancelled in 2020 (1099-C). I know I use Form 982, but for IRS matchng purposes, do I also need to add the cancelled debt as misc income on the 1040 as a positive then as a negative to zero out....or only on the 982? Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted February 21, 2021 Report Share Posted February 21, 2021 That is how I do it - but I think the line 21 or whatever the new line is needs to be added as an attachment as I routinely get an IRS request to explain away the canceled debt D from WI... Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted February 21, 2021 Author Report Share Posted February 21, 2021 2 minutes ago, WITAXLADY said: That is how I do it - but I think the line 21 or whatever the new line is needs to be added as an attachment as I routinely get an IRS request to explain away the canceled debt D from WI... What do you mean by "added as attachment"? On the worksheet for Line 8 (Other income), I was going to include the amount with description of "1099-C Cancelled Debt" then also as a negative amount with description (Form 982 Debt forgiveness exclusion"...Then also include the Form 982. Quote Link to comment Share on other sites More sharing options...
mwrightea Posted February 21, 2021 Report Share Posted February 21, 2021 Put it on Line 8 Schedule 1 and deduct it on Line 22 Schedule 1 of the 1040 if it qualifies. 1 Quote Link to comment Share on other sites More sharing options...
Max W Posted February 23, 2021 Report Share Posted February 23, 2021 Only form 982 is needed if all the debt is excluded. Ten or 12 years ago when the housing market crashed, we filed a lot of COD's in the several hundred thousand $ range and there was never any issue with the IRS. I think the highest amount was over $800K. 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 23, 2021 Report Share Posted February 23, 2021 Max, I think I have one coming up. If COD but liabilities exceeded assets by less than the COD, we still use Form 982, yes? With lots of detail? Just totals and keep backup? Quote Link to comment Share on other sites More sharing options...
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