Janitor Bob Posted February 21 Report Share Posted February 21 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 post Share on other sites
WITAXLADY Posted February 21 Report Share Posted February 21 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 post Share on other sites
Janitor Bob Posted February 21 Author Report Share Posted February 21 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 post Share on other sites
mwrightea Posted February 21 Report Share Posted February 21 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 post Share on other sites
Max W Posted February 23 Report Share Posted February 23 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 post Share on other sites
Lion EA Posted February 23 Report Share Posted February 23 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 post Share on other sites
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.