1099C For Home Equity Line of Credit

[mariaefletes]

On 1099C if box "Personally liable" is check, Does the taxpayer include the amount of the debt forgiveness as other income on line 21 of 1040? The taxpayer lived in the property as their primary residence and used the line of credit for other than home improvements.

[ddoshan]

On 1099C if box "Personally liable" is check, Does the taxpayer include the amount of the debt forgiveness as other income on line 21 of 1040? The taxpayer lived in the property as their primary residence and used the line of credit for other than home improvements.

Even though they refinanced or had home equity debt, some of the cancellation of debt may still qualify under Mortgage Forgiveness Debt reflief. If it does not, then the only other alternative would be the insolvency exception. Otherwise any unqualified debt would be included on line 21.