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If you received Form 1099-C Cancellation of Debt and are eligible to exclude a canceled debt from your income because of any of the following, file Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) with your return. Note. If you didn't receive a Form 1099-C from the lender, you probably don't have canceled debt income and shouldn't need to file Form 982.

The cancellation is intended as a gift

  • The debt is qualified farm debt (see chapter 3 of Publication 225 Farmer's Tax Guide)
  • The debt is qualified real property business debt (see chapter 5 of Publication 334 Tax Guide for Small Business)
  • You are insolvent or bankrupt (see Publication 908 Bankruptcy Tax Guide)
  • The debt is qualified principal residence indebtedness (see page 4 of IRS Instructions for Form 982)

To enter Form 1099-C information in your TaxAct® return:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Other Income in the Federal Quick Q&A Topics menu to expand, then click Cancellation of Debt (Form 1099-C).
  3. Click + Add Form 1099-C to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.

If you qualify for this exclusion, you would use Form 982 to report the exclusion of the canceled debt. Form 982 will follow the Form 1099-C interview.

See IRS Publication 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments for more information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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