1099-c

[Hoosier]

Client received 1099-C for cancellation of mortgage debt. Is the amount in box 2 ($14k) includable as income? If so, how is this reported on the tax forms? Thanks.

[GIMoe]

1099c

Client received 1099-C for cancellation of mortgage debt. Is the amount in box 2 ($14k) includable as income? If so, how is this reported on the tax forms? Thanks.

Goes on line 21, other income.

[WhiteOleander]

If the T/P was in bankruptcy or insolvent on the date the debt was cancelled, it does not have to be included in income. A statement would be attached to the return stating why the cancelled debt was not taxable.

Otherwise, report as ordinary income on line 21.

[S T]

Bankruptcy or Insolvency

Determine if t/p filed bankruptcy or was insolvent. Report 1099-C on line 21 as income, then enter 2nd line with reversal. complete and attach form 982.

Sandy