From TaxAlmanac, A Free Online Resource
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Bankruptcy & Form 1099C
PRYELTON (talk|edits) said:
| 4 March 2006
|
| preparing tax return for person with form 1099C (Cancellation of Debt) due to personal bankruptcy. where to report on 1040 or what form to use>
|
Dennis (talk|edits) said:
| 4 March 2006
|
| Other income, but taxable amount is not usually amount on form. Depends on solvency after inclusion of cancellation.
|
NorthernEA (talk|edits) said:
| 4 March 2006
|
| To read up on this, see IRC Section 108. This talks about being insolvent and discharge of debt and what is or is not taxable. Generally, someone who is in bankruptcy is insolvent, and thus would not have to report any of the 1099C income. However, check the code first, and then if it applies, create a note for the tax return explaining why this income is not taxable to this client and reference it to the code section 108.
|
Riley2 (talk|edits) said:
| 5 March 2006
|
| Any discharged debt should be reported on Form 982 (even though the COD income is nontaxable).
|
To join in on this discussion, you must first
log in.
