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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 3 of IRS Instructions for Form 982)

To report Form 1099-C in the TaxAct® program, go to our Form 1099-C - Entering Cancellation of Debt in Program FAQ.

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. Go to 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 webpage or document at the time it is accessed.

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