New subscriber here....I have a question about insolvency. As you said, the amount cancelled debt should be counted as a liability prior to date of cancellation. What if you are insolvent more than the amount of the cancelled debt? Would you include that total amount on the 982? Would that reduce your taxable income? Thank you so much for this video, very helpful!
Hey, thanks for subscribing! No, the goal of completing the insolvency worksheet is to avoid having to pay taxes on the amount listed on the 1099-C... you cannot exclude any other income. The amount you put on the 982 cannot exceed the amount listed on the 1099-C.
@@josecamano2917 Yes, however, I recommend you not take take too long. You see, when you address debt forgiveness on your tax return or amended return, you only need to include Form 982. If the IRS sees that you didn't include it on your return, they will send you a letter. When that happens, you will need to send them Form 982 AND all your insolvency worksheets. My motto - the less you have to give them, the better.
A loan is a liability; be sure to also add under assets the fair market value on the vehicle (remember to keep the date of debt forgiveness in mind as you calculate what you owe on the loan and the value of the vehicle)
Hey thanks for all your videos.i have a question my wife,she have no income for 2022 but i worked the full year so file jointly,and we got both state and federal refund today i received a 1099-c with the amount of 1845,40 debt forgiven dated on 09/17/2022 and this credit card its from 2010 . so what you suggest for us to so thanks a lot we really appreciate your effort also my wife she is a fan of u and a Subscriber.
Hi there, I just found your video and it is the best one on this matter honestly. I have a question, on the video you say to include the credit card debt but do I include the amount I settled or the full amount I owed? For example, my credit card debt was $5,000 but they settled it for $2,500 what amount should I put under liability?
@@TheTaxLadyLLC thank you so much for responding but I apologize I wasn't clear with my question. What I intended to say is for the insolvency worksheet. Do I add the full amount of credit card debt I owed on insolvency worksheet or the amount I settled for
@@catherinebedoya7831 Hi Catherine - the answer is the same: the amount on the 1099C from the credit card company is the amount you put under liabilities on the insolvency worksheet.
thanks again for your quick reply i am quite confused ,do i have to file 1040x and attach the insolvency worksheet with it ( just to remind i already file my taxes and got my refund)
What does all of this mean for my debt?... If this is executed properly, I'm debt free?.. So, what then? I no longer have to pay my mortgage or car note or credit card bills, etc,?... Genuine inquiry. I'm very intrigued. Thanks!
According to the worksheet I am fully insolvent for the date on the 1099-C. My insolvent is higher that box 2 on my 1099-C. So, what figure do I put in line 2 of the 982 form? Do I put zero on line 21 of the 1040? Or where do I make reference of the 982 form on my 1040 form? Sorry, I have so many questions. I hope you are still answering questions here. I found your video very insightful.
Hi Tracy. For insolvency, you would put the amount shown on the 1099-C on form 982 line 1b and 10a. You do not need to put anything on line 21 of form 1040. You simply attach the form 982 to your return and that's it. Be sure you keep your insolvency worksheet for your records. :)
when completing the insolvency worksheet - do i put the minimum payment on credit cards due that month or my entire account balance at the time before the debt was cancelled ? please assist.
Hi Constance, you put the entire amount due - the liability section wants to know the total amounts you owe prior to the forgiven debt (hence, you also include the forgiven debt).
What if you received a 1099 C, can debt collectors still try to collect on the same debt that has been charged off and that we are filing with the IRS?
@@TheTaxLadyLLCis the date the credit card company files as a loss(charged off account) on their taxes considered to be the official date or is it when they mail out the 1099c form to the consumer stating the debt has been forgiven?
Hi. If my only income is social security retirement and I receive a 1099-C do i send the form 982 with the worksheet or should I also fill out a 1040 and attach form 982 and the worksheet? Thank you.
Hi Stephen! Form 982 is attached to form 1040... so do complete a 1040 and attach just the 982. You do not need to send the worksheet unless the IRS asks you for it. Hope this helps! :)
My wife and son are collecting social security retirement benefits through me. Do i include what they are receiving to what i am receiving as my total benefits? Thank you.
@@StephenAndrus No, you are only responsible to report your own income on your tax return. Their payments are reported to the IRS under their social security numbers and so they report that on their own tax returns, if they file. Hope this makes sense. :)
I think I did everything correctly but I just received a letter today from the IRS again. Do you have an email where we can talk, if you are available for hire? Thank you.
Hi Vicky! Yes, you can contact me via email. The best way is for you message me through my website. (Anyone is welcome to contact me, but putting my actual email address here means loads of junk mail.) Here's the link to my contact page: www.kayethetaxlady.com/contact
I just found your channel and happy I did. My question is when you say to include the 1099c amount in the liabilities section of the worksheet do i add that to the credit card debt or does that amount go on another line? Thank you.
Hi! If the 1099C amount is from credit card debt, then yes, add it to that line. In other words, add it to whatever line item best fits the type of 1099C debt it was. Hope this helps! :)
Thanks Tax Lady for your prompt reply. The scenario for my second question is like this. I had a rental property for more than ten years. I had been taking the depreciation on this property on schedule E. Then the price of the house went under and I filed for deed in lieu with the banker and they issued me a 1099-C. Now when I report this property "Sold" on schedule E then do I have to report the purchase price of the house, the depreciation taken over the years and the fair market value of the house when Deed in Lieu was finalized and calculate any profit or loss on the house or I just have to report only whats on 1099-C as an income and thats it. Also will you please sometime make a video on the different codes in box 6 of 1099-C and how they affect the taxpayer. Thanks.
Hello again. Yes, on the final Sch E for the rental, you will need to act as if the rental home was sold and enter the "sales price" and possibly recapture depreciation. Hopefully you use software and it will help you with the calculations. Please note, you need to report the 1099-C amount on the personal portion of your tax return (as "other income" on Schedule 1, line 8). If you don't, the IRS may think you did not address the 1099-C and send you a letter. Then, when working on the Sch E, be sure you reduce the "sale price" of the home by the 1099-C amount (since you'll be paying tax on it, subtracting it from the sales price prevents you from paying tax twice on the 1099-C amount).
Ok will do but I called a few days ago and they said debt forgiven and I don't have to pay anymore on it.... but I never mentioned what about the title situation
When filling out the insolvency worksheet, especially for debts, can I round off the amounts or should I try to be precise as possible with dollars and cents?
Hi Lisa, you can round the cents up or down, yes. But please don't round the dollars, for example, $76 to $75 or $80... keep it at $76 (some folks change their numbers to end in 5s or 0s). Hope this makes sense! Sorry for the delay. :)
I have a question if you won't mind. After check-marking 1b and writing down the amount of insolvency on number 2 in the 982 Form, is that all for a car repo, or do I need to fill up anything else on Part II or Part III? Thank you very much for sharing.
Hi Vicky! Yes, you do need to complete line 10a in Part II (match line 2). I realize this point is not made in the video. People ask great questions and all the information is here - please see this comment section for more details and/or the video description for more info on how to complete Part II line 10a or 10b.
Thank you for the video and responses! I have a quick question also if you don't mind. I'm filing form 982 due to a personal auto loan that was cancelled. According to the insolvency worksheet, I am partially insolvent. Do I need to put anything in the reduction of tax attributes in part 2? I am good with everything up to that point. Then it gets confusing. Thank you!
Hi Jared! My bad - it's not clear in the video but I have tried to include it here in the comments and in the video description. But yes, you do need to utilize line 10 in Part II of form 982. In your case, you need to put the same amount you enter on line 2 (your partial insolvency amount) in Part II, line10a. Hope this helps! :)
Hey. I'm pretty sure the debt consolidation company doesn't prepare tax returns too, but you could ask if you like. I'm thinking you either need to prepare the form on your own or hire a tax preparer. :)
Hi Juan. It depends. If the amount on the 1099-C is greater than the amount of insolvency, then you put the amount of insolvency. But if the amount of insolvency is greater than the amount on the 1099-C, you put the amount on the 1099-C. I hope you will review the video again to get a better understanding of why. Thanks!
Hi! You didn't mention how they're trying to collect but I assume its through notices in the mail? If so, it's possible the notices are being generated and mailed out automatically by their computer system. My guess is that either someone didn't update the system or they did update the system, however, the computer already had notices printed prior to the update. You may want to give it some time to see if it continues or call them to be sure it's been removed. Once you have the title in your hands, you know for sure the car is yours and the debt is cleared. Generally speaking though, they're not supposed to file paperwork canceling your debt and then continue with collection efforts. Hope this helps :)
Hello Kaye, My question is, You said on form 982 the amount cannot exceed what is on your 1099-C? I am confused because when I filled out the insolvency worksheet my debts are greater than my assets and so my line 38 is way more than my 1099-c amount. My line 38 on the worksheet is even higher than my income to be exact. So what do I do if your saying my amount on form 982 cant be more than my 1099-C? My next question is on the insolvency worksheet, it ask you what is your mortgage on your home or business etc.. Does it mean my total amount I owe for the house or my monthly payment that I owe on my home? Next question on form 982, Do you have to answer yes on line 3? How do I fill out line 4-13? I am confused on what to do after question 2 on form 982, when all of my 1099-C are from credit card cancelation. What do I do if I have more than one 1099-C? Do I fill out a new form 982 for each 1099-C? Can I still file schedule-C with my other side job that I have when I have all of these 1099-C to file, because these 1099-C are personal debt not business debt. Can you please respond and let me know thank you.
Hi Alisha. For credit card and primary residence debt forgiveness, the only other line item on Form 982 you may want to use is 10a or 10b. I have used 10a for credit card debt forgiveness (box 1b is checked) and 10b for principal residence debt forgiveness (box 1e is checked). The amount on these lines needs to match the amount put on line 2. If you have more than one 1099-C and you end up checking both box 1b and 1e, put the appropriate amount from line 2 on each line 10a (credit cards) and 10b (primary residence), ensuring that the total between the two is equal to the amount placed on line 2. The remainder of your questions are answered in the video or here in the comments section, so I hope you will review them again to gain further clarification. In summary: the purpose of form 982 is to inform the IRS if any 1099-C income is nontaxable; therefore, you cannot use it or the results of your insolvency worksheet(s) to eliminate any other types of income. 1099-C income is a separate issue you are addressing on your tax return and you need to report all other income as usual, including Schedule C income. The insolvency worksheet is used to calculate your TOTAL liabilities and assets at the time of debt forgiveness. If you have more than one 1099-C and each has a different date of cancelation, then you need to complete an insolvency worksheet for each date in order to determine if you were insolvent at each time of debt forgiveness. Hope this helps! J
Thank you very much. I will work each different 1099c because yes they all have different dates on them. I am so thankful you have reached out to me because this has been so stressful for me this year and the forms were even more confusing. If I have another question I hope you will be able to answer my question.. Thank you again so much.
so in the case w/ multiple 1099-c's in one tax yr -- fill out multiple wksheets , but fill out only ONE 982. how do you arrive at the one number in this one 982?
can you clarify something on Part 2 of form 982 -- line 10a is a part of Part 2 , too -- is the irs here trying to REDUCE the tax basis of our personal property ( home) to the extent that we are excluding forgiven-debt-income here? Does this mean that it will INCREASE the amt of taxation the home will be subject to on selling it ( selling -basis = gain) and be taxed at capital gain tax rate ? if so , does this mean i saved not being taxed at ord income rate today ( this yr for me about 15 pct) only for this same amt to be taxed at 35 pct ( is that the cap gain rate)?. Is this an incorrect understanding?
idic5 I filled out a new form for each one bc I had several 1099c I did a new work sheet and 982. Bc I paid on different dates with my creditors on my cards so things changed around each time when I setteled on a payment. Unless you paid all of them on the same date I assume
Thanks for the info The Tax Lady LLC! Super helpful. I have a question, if I received a zombie debt from years prior and it came in this year would I include the amount on the 1099 C in the current years 928? So, for example, if I had a $3000 settled credit card balance from 2005 and got the 1099C in 2018 would I include that $3000 in my liabilities section? I imagine so but just wanted to make sure.
Yes, what matters to the IRS is the year the date was forgiven, regardless of when it was accumulated. The year should be visible in large bold letters on the 1099-C. That"s the year you report it. And yes, you do include the amount of the debt under liabilities. Thanks for asking!
Hello Tax Lady, I just received a 1099 C after I've already filed my taxes for a buy here pay here car that I no longer have in my possession, i sent it back voluntarily before they discharged the debt in January 2019. Here's the question: They were still able to send me the 1099 C even though I don't have the car nor did I ever have the actual money for this "loan"? Thank you in advance.
Hi! Honestly, I don't know what "allows" a company to send you a 1099-C. My only guess is that you owed them something. Was the amount on the 1099-C for the full value of the car or partial? Anyway, what I do know is how to deal with your tax return so you don't get a bill from the IRS. Since you've already filed your return, you can file an amended return with the form 982 attached. If you were insolvent, it should be easy to do. Let me know if you'd like help with that.
@@TheTaxLadyLLC Thank you for reply! Yes, I would like help with proving insolvency. Would the only forms I need be the 1040X, 982, and and insolvency worksheet? So far I have those forms but the 982 has "Rev. March 2018" on it. Is that the correct one? Thank you.
@@introvertedturtle88 Yes, that is the most up-to-date version of form 982. If you need to communicate details and don't want them publicized on this platform, please visit my website at kayethetaxlady.com and send me a comment.
Thank you so much for reply. For insolvency on form 982, would I put the amount in box 2 from the 1099 C on line 2 and 10a? Do I need to adjust my income on 1040X and add 1099 C- box 2 amount? And is "identifying number" on 982 my social security number? And do I need to fill out part 3 if I am not a cooperation? I really appreciate your help Tax Lady.
@@introvertedturtle88 If you are insolvent, all you need to do is fill out the Form 982, attach it AND your worksheet to the 1040X with no changes to your income, no refund, no taxes due. Yes, you are correctly filling out the form, part 3 does not apply to you so leave it blank, and yes, identifying number is another way of saying social security number. Another common way is "tax identification number."
Thanks for such a nice video. I have received 1099-C for exercising Deed In Lieu option for a rental property. Is filling the 982 form is mandatory with reporting 1099-C or I can just report the figures on 1099-C. I don't think by reporting the forgiven debt on 1099-C will increase my taxes by much. Thanks.
If you received a 1099-C, you need to address it on your tax return so yes, you need to fill out the 982 if the debt was for your principal residence or you were insolvent. Please see the video for instructions on how to do either method. Which one you use depends on what the cancelled debt was for... your principal residence or other debt.
I receive SSDI and SSI. I received 1099C for canceled student loan debt. When I fill my Form 982, am I supposed to attach a 1040 also? In order to fill the “taxable income” section of 1040? Or do I just send 982 and Insolvency Worksheet?
So last year (2018) we settled on two credit cards that were in wife's name only. We received two different 1099-Cs from the two credit card companies with two different discharge dates. One is dated 3/20/2018 and the other one 7/15/2018. So if we are working the insolvency work sheet which retroactive date do we use when it comes to listing our debts, March or July 2018? How do we address both the dates? Again please keep in mind the 1099-C forms were only issued in my wife's name. Can we include debts that were in my name only in the insolvency worksheet since we file joint taxes? Your feedback will be highly appreciated. Thank you.
Hi! I'd like to point out for everyone that the video and this comment section answers most questions. However, it's worth repeating: if you have more than one 1099-C, you need to complete an insolvency worksheet for EACH one, using the date to figure out how much you owed/owned on that day. Do the first dated one first. If you are insolvent for any amount of the first 1099-C, make sure you deduct that amount from the second worksheet's asset section. Regarding your second question, if only one of you was responsible for the debt, then use only that person's debts/assets on the worksheet. :)
@@TheTaxLadyLLC Thank you so much for your response. I tried doing the insolvency worksheet using only my wife's debts and assets and unfortunately she was not insolvent because she has a lot in her 401K and that makes her assets greater than her debts. However if I add my debts and assets (credit card balances and I have very small 401K account) that renders us insolvent. Since we have always joint filed our taxes, anyway possible I could add my debts and assets to the worksheet? Please let me know. Thank you.
Technically, if she was solely responsible for the debt then you can only include her information on the worksheet. If you were responsible in anyway, then yes, you can include your information. Here's something you can try: go through her retirement plans to be sure you have to include them. There was a court case (Schieber, et ux v. Commissioner) that concluded "defined benefit plans" do not have to be included as an asset on the worksheet. Defined benefit retirement accounts cannot be converted to a lump-sum amount, cannot be sold, and cannot be borrowed against. If any of her retirement plans are of this type, you can remove them from the worksheet and recalculate. Hope this helps.
@@TheTaxLadyLLC Thank you so much again for your response. So my wife's 401K balance around the time the debt was discharged was $83K. My wife is not 59 and half years yet so therefore cannot withdraw 100% of her 401K balance. At that time she could only withdraw $23K and borrow up to $42K. She has no other benefits or cash value life insurance. So which of the three 401k numbers $83K, $23K or $42K should I be putting in the worksheet against her 401K balance? Also I should have mentioned that I live in Texas which is considered as a community property state where debts incurred by one spouse automatically becomes a debt owed by both. Please let me know if this changes anything if that qualifies me to list my debts in the insolvency worksheet? Again thank you so much for your help.
I am understanding you to say that at the time of the debt cancellation, she could receive $23k AND a loan for $42k. So that's $65k she could get at the time, is this correct? If so, then the number you put on the insolvency worksheet is $65k. But if you are saying she could receive $23k OR a loan for $42k, then use $42k. I understand you live in a community property state, but it's my understanding that even in community property states a loan signed by one spouse is not the responsibility of the other. If you know for certain that you were responsible for the debt, then yes, you can include your info.
Hi Kay, thank you very much for your very informative video. There is no out there like it! I have completed the form 982 and just wanted to expertise advice. I have rec'd a proposed amount due from the IRS re: 1099-C due to an auto repo in 2000. I never rec'd the 1099-C from the creditor. Nonetheless, I am claiming insolvency. From line 38 of the insolvency worksheet (this amount is much higher than the amount of the cancellation of debt). I entered that amount on Line 2 (Form 982) and checked box 1b. I then entered the same amount on line 10a. Does that sound like I done this correctly? Please advise and thank you for you time and expertise. Much appreciated.
Hi Scherri! Everything sounds correct except I'm not clear what amount you put on line 2? I think you're saying that you put the amount from the 1099-C on line 2, but I'd like to be sure. Thanks!
@@TheTaxLadyLLC Hi Kay, thank you for your prompt response! 1099-C: $5158, Insolvency Worksheet - Line 38: $31,208. I entered $31208 on Form 982 Line 2 & Line 10a ?
Hello, Just came across your video and it helped a lot. What if a spouse has no income but received a 1099c. We don't live in a community property state and the only asset both names are on is a retirement account. We also file jointly, do we have to file the 1099c.
Regardless of whether your spouse has income or not, if you file a joint return, you must address the 1099-C on the tax return ... Did your spouse complete the insolvency worksheet yet? Do you know if s/he was insolvent or not? If not, you do have the legitimate option of filing separately if that makes the tax situation better.
Thank you for that quick response, I appreciate it. We did fill out the work sheet, we are confused about interest on pension or retirement. Should she claim half or is it the interest from this year only. Lot of confusing information. Trying to find a good example. Thank you again.
Yes, the worksheet is confusing! By "interest in pension plan," they are not referring to how much interest it has earned... they are asking how much money you have in the pension plan, total. And yes, you can list half for your spouse's share.
Thank you. If I had amended the return and sent for 2017 due receiving the 1099c late so I sent in amend with out the 982 can i send in my 982 now and have it count for my insolvency to my amended
@@TheTaxLadyLLC I think the question the person is trying to ask is: Can form 982 be sent alone and will it count for insolvency after having the Tax Return amended and sent by it self?
Hi Vicky - great attempt! Even if you're wrong, I will answer cause this is a question that has not been asked before, lol! If you receive a letter from the IRS about a 1099-C, and the only change to the return is a Form 982, you can send Form 982 alone in response to the letter. However, if you filed an original return without Form 982 and then later filed an amended return, also not attaching Form 982, you will need to file another amended return and attach Form 982. Here's an excerpt from the IRS's Form 982 instructions: If you filed your tax return without attaching Form 982, you can still make an election by filing an amended return within 6 months of the due date of the return (excluding extensions). Write “Filed pursuant to section 301.9100-2” on the amended return and file it at the same place you filed the original return. I will say that I have helped several people send in a Form 982 well after the six month period and it has been accepted by the IRS. Hope this clears things up for LNK INC! Thanks again Vicky.
One more question: As an SSDI/SSI recipient, am I supposed to add the amount of SSDI I received in 2017 in the 1040 Line 20a? Or do I leave it blank and just put $0 in Line 21 Other Income? Or both?
Since social security is your only source of income, it is not taxable and so, if you were fully insolvent at the time of debt forgiveness, just put zero on line 21.
One more thing: On form 982, please be sure to complete either line 10a or 10b -- my video does not say this. Whatever you put on line 2, put on line 10a or 10b, whichever applies. You do not need to include your insolvency worksheet(s).
No, but you do complete multiple insolvency worksheets, one for each date of debt forgiveness. I hope you will take the time to read through the comments... others have asked the same question and you may find the discussions informative. Thank you for watching!
The IRS will likely process the return you filed as you filed it... and then later, if they catch the missing 1099-C, they will send you a letter asking you to address it.
What about a debt from 20 years ago? I had debt insurance in case I lost my job. Well I lost my job and sent in all the paper to file a claim. That was the last i heard about it. I never got any more statements or anything. I thought the debt was gone. NOW...20 YEARS LATER... a collection agency is saying that I have to pay the balance. When I told them I lost my job and I filled out the credit insurance...they replied that I still needed to pay and said "WE KNOW WHERE YOU LIVE" then hung up on me. THEY KEEP CALLING ME TRYING TO COLLECT A DEBT FROM 20 YEARS AGO. CAN THEY DO THAT? I Never heard of this company before and they keep harrassing me. They called today and said something about filing a 1099. I couldnt really hear what the guy said cuz he talked so low and he left a message on my voice mail. Any help or advice would be greatly appreciated. Thanks.
What is also funny is they NEVER SEND ME ANYTHING IN THE MAIL....NO FORMS...NO BALANCE...NO NOTHING. Im not going to pay for a debt that should had been cancelled 20 years ago. Im also not just going to pay some yahoo over the phone. Dont you think they would have sent me some paperwork or SOMETHING in the mail to my address with their name on it? Thanks.
He also said something about court....but they called 6 months ago about going to court, AND NOTHING HAPPENED. NO COURT SUMMONS...NO COURT DATE...NO PAPERWORK SENT TO MY HOUSE. All I keep getting are threatening phone calls but NO LETTERS OR ANYTHING IN THE MAIL. THEY ALWAYS WANT ME TO PAY OVER THE PHONE. IF IT WAS A OUTSTANDING DEBT....WHY WAIT 20 YEARS TO TRY AN COLLECT? WHY DIDNT I HEAR ANYTHING ABOUT THIS 10 YEARS AGO? WHY NOW? Like Judge Judy always says " If it doesnt make sence...THEN ITS NOT TRUE". AND THESE PEOPLE CALLING MAKE NO SENSE. LOL. Thanks for any advice you can give. Ps. I did subscribe to your channel. You appear to be honest and kind. Thanks. :0)
Hey. Parts of what your saying makes me wonder if the phone calls are legit. There are so many scams out there to steal your identity, and some of them involve the kind of harassment and threats you've mentioned. So please, don't give any personal info to them. I'm not an attorney, nor am I an expert at debt collection, but it does seem like there is a "statute of limitations" on how long a company can attempt to collect. For example, the IRS has 10 years to collect from someone who has filed a tax return with a balance due. Perhaps you can get a consult with an attorney or an expert in the field to learn more. In the meantime, perhaps do not engage in conversation with these people anymore. Block their calls or simply hang up when you realize its them. Best wishes to you. :)
I am new to your site, so I have a couple of questions. In an insolvency due to a forclosure in 2018, which boxes do I check on form 982? Do I check 1. b and e, then put the amount in 2 and then go to Part ll 10a put the amount in and then attach the Insolvency Worksheet to my amended 1040X? I appreciate any help you can give me.
Hi, I apologize for the delay. Seems that I sometimes receive notifications from youtube and sometimes don't. :( If you foreclosed on your home in 2018 and, after completing the insolvency worksheet, you determined that you were insolvent, then you check box 1b, put the amount of insolvency (no more than the amount shown on your form 1099-C) on line 2, and then put that same amount on line 10a. Hope this isn't too late to help :)
I received a 1099-C 2015 for cancelled credit card debt. The date on the 1099 shows 12/30/15, but the debt was actually cancelled in January, 2013. I know I can prove full insolvency in Jan 2013, but my financial situation has improved a little and I might only be partially insolvent in Dec, 2015. Do I have to use the date on the 1099? Why do they wait two years to mail it?
+Gail Scarfino I apologize for not replying sooner... i am new to this format and still learning how it works. If you believe the lender made a mistake on the form, you can ask them to correct it. But yes, you do have to determine insolvency as of the date on the form they submitted to the IRS.
Hey! I'm just a tad confused maybe someone can help clarify. I got a few 1099 c's and will be claiming insolvent. I don't own a home or car. The 1099 c's are for credit card debt. I understand the insolvency worksheet and part 1 of form 982. I saw in the video it says to check line 1b and put the amount in line 2. And that's it. Unless I missed the part about also putting the amount in line 2 in line 10a in part 2. Did I miss that part? I saw someone ask the same question in the comments and they were told yes to answer line 10a as well. Do we fill in line 10a or not? I watched the video a few times and maybe I'm missing the instruction idk lol any help would be awesome yall thank you
Hi, thank you so much Ariana, you are correct... the video is missing details on how to complete Part II, but it is mentioned here in the comment section. On form 982, if you check box 1b, the amount you put on line 2 is also put on line 10a. If a person checks box 1e, it goes on line 10b. Basically, you are telling the IRS that, as of the date of debt forgiveness, you will consider your belongings/assets to be worth less than they were before debt forgiveness. What you put on line 2 is how much less your assets are worth. If you valued your belongings at $5k and the amount you put on line 2 is $1k, you will now consider the value of your items to be $4k. Effectively, you are saying (a) you will keep this in mind when taking tax deductions if you donate personal items and (b) you will pay taxes on any future gains from selling your belongings. I appreciate you bringing this up and I'm sure others will find your question helpful :)
Hello.. I received 1099-c for some charged off CC debt and I included F-982 in my tax returns in 2017 and 2018. I came out of the debts this year and willing to buy a home. Living in an apartment is becoming challenging as kids growing up. Will this a concern for me not being eligible for applying a mortgage loan? please let me know. Thank you
Please follow the instructions in the video to determine if it's taxable, partially taxable, or not taxable and then amend your return. If you need assistance amending your return, you can hire me or someone in your area to prepare one.
New subscriber here....I have a question about insolvency. As you said, the amount cancelled debt should be counted as a liability prior to date of cancellation. What if you are insolvent more than the amount of the cancelled debt? Would you include that total amount on the 982? Would that reduce your taxable income? Thank you so much for this video, very helpful!
Hey, thanks for subscribing! No, the goal of completing the insolvency worksheet is to avoid having to pay taxes on the amount listed on the 1099-C... you cannot exclude any other income. The amount you put on the 982 cannot exceed the amount listed on the 1099-C.
***** Excellent, that makes perfect sense. Thank you!
One of the best videos I have ever seen on form 1099-C. Thank you so much.
Thank you! Glad you liked it. :)
Hi i did filed my taxes but i got 10 chargeoffs forget to add it what my choices thanks ?
Hi Jose! You can file an amended return and include it.
@@TheTaxLadyLLC ok i can doit anytime right?🙌👌thank you so much
@@josecamano2917 Yes, however, I recommend you not take take too long. You see, when you address debt forgiveness on your tax return or amended return, you only need to include Form 982. If the IRS sees that you didn't include it on your return, they will send you a letter. When that happens, you will need to send them Form 982 AND all your insolvency worksheets. My motto - the less you have to give them, the better.
Can you still keep your car if you file one of my these
Yes, of course :)
What if you received a 1099-C at the end of April 2022 for a repossession/auction in 2015?
Seriously, the date on the form 1099C says the debt was canceled in 2015?
Also, does car loans count as liabilities or assets? will really appreciate your help
A loan is a liability; be sure to also add under assets the fair market value on the vehicle (remember to keep the date of debt forgiveness in mind as you calculate what you owe on the loan and the value of the vehicle)
Hey thanks for all your videos.i have a question my wife,she have no income for 2022 but i worked the full year so file jointly,and we got both state and federal refund today i received a 1099-c with the amount of 1845,40 debt forgiven dated on 09/17/2022 and this credit card its from 2010 . so what you suggest for us to so thanks a lot we really appreciate your effort also my wife she is a fan of u and a Subscriber.
Hi! You'll need to complete the insolvency worksheet with the Sept 17, 2022 date in mind to see if you need to pay tax on the forgiven debt.
Thanks! Very Helpful video!!!
Cool! Glad you found it helpful :)
Hi there, I just found your video and it is the best one on this matter honestly. I have a question, on the video you say to include the credit card debt but do I include the amount I settled or the full amount I owed? For example, my credit card debt was $5,000 but they settled it for $2,500 what amount should I put under liability?
@thetaxlady
Hi Catherine! What amount is listed on the 1099C? That's the amount you use.
@@TheTaxLadyLLC thank you so much for responding but I apologize I wasn't clear with my question. What I intended to say is for the insolvency worksheet. Do I add the full amount of credit card debt I owed on insolvency worksheet or the amount I settled for
@@catherinebedoya7831 Hi Catherine - the answer is the same: the amount on the 1099C from the credit card company is the amount you put under liabilities on the insolvency worksheet.
@@TheTaxLadyLLC awesome thanks again for answering
I really like how you explained everything in such easy to follow terms. I enjoyed this video. Thank you!
Awe, thank you! I'm glad you found it helpful. :)
thanks again for your quick reply i am quite confused ,do i have to file 1040x and attach the insolvency worksheet with it ( just to remind i already file my taxes and got my refund)
This is a great video. I wish I found it sooner. Thank you.
Cool! :) Thanks for the feedback.
What does all of this mean for my debt?...
If this is executed properly, I'm debt free?..
So, what then? I no longer have to pay my mortgage or car note or credit card bills, etc,?...
Genuine inquiry. I'm very intrigued.
Thanks!
Hi. If you receive a 1099-C from a company, the debt you had with them is considered canceled/forgiven.
According to the worksheet I am fully insolvent for the date on the 1099-C. My insolvent is higher that box 2 on my 1099-C. So, what figure do I put in line 2 of the 982 form? Do I put zero on line 21 of the 1040? Or where do I make reference of the 982 form on my 1040 form? Sorry, I have so many questions. I hope you are still answering questions here. I found your video very insightful.
Hi Tracy. For insolvency, you would put the amount shown on the 1099-C on form 982 line 1b and 10a. You do not need to put anything on line 21 of form 1040. You simply attach the form 982 to your return and that's it. Be sure you keep your insolvency worksheet for your records. :)
@@TheTaxLadyLLC Wow, thank you for the fast reply. Hmmm, no line 1b on 982. Do you mean line 2? I did check the box 1b.
Yes, yes, sorry I was running out the door and wrote too quickly. You check box 1b and put the amount from your 1099-C on line 2 and 10a.
when completing the insolvency worksheet - do i put the minimum payment on credit cards due that month or my entire account balance at the time before the debt was cancelled ? please assist.
Hi Constance, you put the entire amount due - the liability section wants to know the total amounts you owe prior to the forgiven debt (hence, you also include the forgiven debt).
What if you received a 1099 C, can debt collectors still try to collect on the same debt that has been charged off and that we are filing with the IRS?
Hi! No, debt collectors should not continue to pursue you after debt has been officially canceled.
@@TheTaxLadyLLCis the date the credit card company files as a loss(charged off account) on their taxes considered to be the official date or is it when they mail out the 1099c form to the consumer stating the debt has been forgiven?
The official date of forgiveness is shown on the Form 1099C
@@TheTaxLadyLLC Thank you ❤️
Do the issue 1099 c for medical bill that been forgiven for taxes
Hi. Generally speaking, only institutions that lend money submit 1099-C forms.
Ok I was a little confuse I thought was all debt forgivness
Hi. If my only income is social security retirement and I receive a 1099-C do i send the form 982 with the worksheet or should I also fill out a 1040 and attach form 982 and the worksheet? Thank you.
Hi Stephen! Form 982 is attached to form 1040... so do complete a 1040 and attach just the 982. You do not need to send the worksheet unless the IRS asks you for it. Hope this helps! :)
Thank you!
My wife and son are collecting social security retirement benefits through me. Do i include what they are receiving to what i am receiving as my total benefits? Thank you.
@@StephenAndrus No, you are only responsible to report your own income on your tax return. Their payments are reported to the IRS under their social security numbers and so they report that on their own tax returns, if they file. Hope this makes sense. :)
Thank you! You are so kind. All of your advice makes perfect sense !
I think I did everything correctly but I just received a letter today from the IRS again. Do you have an email where we can talk, if you are available for hire? Thank you.
Hi Vicky! Yes, you can contact me via email. The best way is for you message me through my website. (Anyone is welcome to contact me, but putting my actual email address here means loads of junk mail.) Here's the link to my contact page: www.kayethetaxlady.com/contact
You are so great and the most helpful. Thank you for all the information
Why thank you!!! :)
I just found your channel and happy I did. My question is when you say to include the 1099c amount in the liabilities section of the worksheet do i add that to the credit card debt or does that amount go on another line? Thank you.
Hi! If the 1099C amount is from credit card debt, then yes, add it to that line. In other words, add it to whatever line item best fits the type of 1099C debt it was. Hope this helps! :)
Thank you!
My student loans have been canceled I need to file this 1099C and plan to claim insolvency because of my disability and low fixed income.
Thanks Tax Lady for your prompt reply. The scenario for my second question is like this. I had a rental property for more than ten years. I had been taking the depreciation on this property on schedule E. Then the price of the house went under and I filed for deed in lieu with the banker and they issued me a 1099-C. Now when I report this property "Sold" on schedule E then do I have to report the purchase price of the house, the depreciation taken over the years and the fair market value of the house when Deed in Lieu was finalized and calculate any profit or loss on the house or I just have to report only whats on 1099-C as an income and thats it. Also will you please sometime make a video on the different codes in box 6 of 1099-C and how they affect the taxpayer. Thanks.
Hello again. Yes, on the final Sch E for the rental, you will need to act as if the rental home was sold and enter the "sales price" and possibly recapture depreciation. Hopefully you use software and it will help you with the calculations. Please note, you need to report the 1099-C amount on the personal portion of your tax return (as "other income" on Schedule 1, line 8). If you don't, the IRS may think you did not address the 1099-C and send you a letter. Then, when working on the Sch E, be sure you reduce the "sale price" of the home by the 1099-C amount (since you'll be paying tax on it, subtracting it from the sales price prevents you from paying tax twice on the 1099-C amount).
I have a 1099 c from a autoloan ...is my debt forgiven?
A 1099-C is an informational document that is sent to both you and the IRS and it informs you and the IRS that debt was forgiven, yes.
Ok thanks it was for a autoloan can I still get the title since they forgave the loan...
If they let you keep the car, I don't see why not. But that's not my area of expertise, so you may want to ask them.
Ok will do but I called a few days ago and they said debt forgiven and I don't have to pay anymore on it.... but I never mentioned what about the title situation
Okay, good luck! :)
In the Insolvency Worksheet in Liabilities Line 5 (Student Loans), do I write the amount of the canceled debt that is in my 1099C?
Yes
The Tax Lady LLC Thank you.
When filling out the insolvency worksheet, especially for debts, can I round off the amounts or should I try to be precise as possible with dollars and cents?
Hi Lisa, you can round the cents up or down, yes. But please don't round the dollars, for example, $76 to $75 or $80... keep it at $76 (some folks change their numbers to end in 5s or 0s). Hope this makes sense! Sorry for the delay. :)
@@TheTaxLadyLLC Got it. Thank you so much for the reply.
I have a question if you won't mind. After check-marking 1b and writing down the amount of insolvency on number 2 in the 982 Form, is that all for a car repo, or do I need to fill up anything else on Part II or Part III? Thank you very much for sharing.
Hi Vicky! Yes, you do need to complete line 10a in Part II (match line 2). I realize this point is not made in the video. People ask great questions and all the information is here - please see this comment section for more details and/or the video description for more info on how to complete Part II line 10a or 10b.
@@TheTaxLadyLLC Thank you very much.
Thank you for the video and responses! I have a quick question also if you don't mind. I'm filing form 982 due to a personal auto loan that was cancelled. According to the insolvency worksheet, I am partially insolvent. Do I need to put anything in the reduction of tax attributes in part 2? I am good with everything up to that point. Then it gets confusing. Thank you!
Hi Jared! My bad - it's not clear in the video but I have tried to include it here in the comments and in the video description. But yes, you do need to utilize line 10 in Part II of form 982. In your case, you need to put the same amount you enter on line 2 (your partial insolvency amount) in Part II, line10a. Hope this helps! :)
Thank you for the quick reply. I definitely should have read the description. Truly appreciated!
You're welcome! Appreciate the feedback :)
If a debt consolidation company negotiated for me, will I still need to file these on my own or should I contact the debt consolidation company?
Hey. I'm pretty sure the debt consolidation company doesn't prepare tax returns too, but you could ask if you like. I'm thinking you either need to prepare the form on your own or hire a tax preparer. :)
I have a question about line 2 on form 982. do you put the amounts of 1099c on line 2 or the amount of insolvency?
Hi Juan. It depends. If the amount on the 1099-C is greater than the amount of insolvency, then you put the amount of insolvency. But if the amount of insolvency is greater than the amount on the 1099-C, you put the amount on the 1099-C. I hope you will review the video again to get a better understanding of why. Thanks!
I just discharged my car and they’re still looking to collect it, after i was told my title was coming?
Hi! You didn't mention how they're trying to collect but I assume its through notices in the mail? If so, it's possible the notices are being generated and mailed out automatically by their computer system. My guess is that either someone didn't update the system or they did update the system, however, the computer already had notices printed prior to the update. You may want to give it some time to see if it continues or call them to be sure it's been removed. Once you have the title in your hands, you know for sure the car is yours and the debt is cleared. Generally speaking though, they're not supposed to file paperwork canceling your debt and then continue with collection efforts. Hope this helps :)
Hello Kaye, My question is, You said on form 982 the amount cannot exceed what is on your 1099-C? I am confused because when I filled out the insolvency worksheet my debts are greater than my assets and so my line 38 is way more than my 1099-c amount. My line 38 on the worksheet is even higher than my income to be exact. So what do I do if your saying my amount on form 982 cant be more than my 1099-C? My next question is on the insolvency worksheet, it ask you what is your mortgage on your home or business etc.. Does it mean my total amount I owe for the house or my monthly payment that I owe on my home? Next question on form 982, Do you have to answer yes on line 3? How do I fill out line 4-13? I am confused on what to do after question 2 on form 982, when all of my 1099-C are from credit card cancelation. What do I do if I have more than one 1099-C? Do I fill out a new form 982 for each 1099-C? Can I still file schedule-C with my other side job that I have when I have all of these 1099-C to file, because these 1099-C are personal debt not business debt. Can you please respond and let me know thank you.
Hi Alisha. For credit card and primary residence debt forgiveness, the only other line item on Form 982 you may want to use is 10a or 10b. I have used 10a for credit card debt forgiveness (box 1b is checked) and 10b for principal residence debt forgiveness (box 1e is checked). The amount on these lines needs to match the amount put on line 2. If you have more than one 1099-C and you end up checking both box 1b and 1e, put the appropriate amount from line 2 on each line 10a (credit cards) and 10b (primary residence), ensuring that the total between the two is equal to the amount placed on line 2.
The remainder of your questions are answered in the video or here in the comments section, so I hope you will review them again to gain further clarification. In summary: the purpose of form 982 is to inform the IRS if any 1099-C income is nontaxable; therefore, you cannot use it or the results of your insolvency worksheet(s) to eliminate any other types of income. 1099-C income is a separate issue you are addressing on your tax return and you need to report all other income as usual, including Schedule C income. The insolvency worksheet is used to calculate your TOTAL liabilities and assets at the time of debt forgiveness. If you have more than one 1099-C and each has a different date of cancelation, then you need to complete an insolvency worksheet for each date in order to determine if you were insolvent at each time of debt forgiveness. Hope this helps! J
Thank you very much. I will work each different 1099c because yes they all have different dates on them. I am so thankful you have reached out to me because this has been so stressful for me this year and the forms were even more confusing. If I have another question I hope you will be able to answer my question.. Thank you again so much.
so in the case w/ multiple 1099-c's in one tax yr -- fill out multiple wksheets , but fill out only ONE 982. how do you arrive at the one number in this one 982?
can you clarify something on Part 2 of form 982 -- line 10a is a part of Part 2 , too -- is the irs here trying to REDUCE the tax basis of our personal property ( home) to the extent that we are excluding forgiven-debt-income here? Does this mean that it will INCREASE the amt of taxation the home will be subject to on selling it ( selling -basis = gain) and be taxed at capital gain tax rate ? if so , does this mean i saved not being taxed at ord income rate today ( this yr for me about 15 pct) only for this same amt to be taxed at 35 pct ( is that the cap gain rate)?. Is this an incorrect understanding?
idic5 I filled out a new form for each one bc I had several 1099c I did a new work sheet and 982. Bc I paid on different dates with my creditors on my cards so things changed around each time when I setteled on a payment. Unless you paid all of them on the same date I assume
Thanks for the info The Tax Lady LLC! Super helpful. I have a question, if I received a zombie debt from years prior and it came in this year would I include the amount on the 1099 C in the current years 928? So, for example, if I had a $3000 settled credit card balance from 2005 and got the 1099C in 2018 would I include that $3000 in my liabilities section? I imagine so but just wanted to make sure.
Yes, what matters to the IRS is the year the date was forgiven, regardless of when it was accumulated. The year should be visible in large bold letters on the 1099-C. That"s the year you report it. And yes, you do include the amount of the debt under liabilities. Thanks for asking!
Hello Tax Lady, I just received a 1099 C after I've already filed my taxes for a buy here pay here car that I no longer have in my possession, i sent it back voluntarily before they discharged the debt in January 2019. Here's the question: They were still able to send me the 1099 C even though I don't have the car nor did I ever have the actual money for this "loan"? Thank you in advance.
Hi! Honestly, I don't know what "allows" a company to send you a 1099-C. My only guess is that you owed them something. Was the amount on the 1099-C for the full value of the car or partial? Anyway, what I do know is how to deal with your tax return so you don't get a bill from the IRS. Since you've already filed your return, you can file an amended return with the form 982 attached. If you were insolvent, it should be easy to do. Let me know if you'd like help with that.
@@TheTaxLadyLLC Thank you for reply! Yes, I would like help with proving insolvency. Would the only forms I need be the 1040X, 982, and and insolvency worksheet? So far I have those forms but the 982 has "Rev. March 2018" on it. Is that the correct one? Thank you.
@@introvertedturtle88 Yes, that is the most up-to-date version of form 982. If you need to communicate details and don't want them publicized on this platform, please visit my website at kayethetaxlady.com and send me a comment.
Thank you so much for reply. For insolvency on form 982, would I put the amount in box 2 from the 1099 C on line 2 and 10a? Do I need to adjust my income on 1040X and add 1099 C- box 2 amount? And is "identifying number" on 982 my social security number? And do I need to fill out part 3 if I am not a cooperation? I really appreciate your help Tax Lady.
@@introvertedturtle88 If you are insolvent, all you need to do is fill out the Form 982, attach it AND your worksheet to the 1040X with no changes to your income, no refund, no taxes due. Yes, you are correctly filling out the form, part 3 does not apply to you so leave it blank, and yes, identifying number is another way of saying social security number. Another common way is "tax identification number."
Thanks for such a nice video. I have received 1099-C for exercising Deed In Lieu option for a rental property. Is filling the 982 form is mandatory with reporting 1099-C or I can just report the figures on 1099-C. I don't think by reporting the forgiven debt on 1099-C will increase my taxes by much. Thanks.
Hi Raj! No, the 982 is not mandatory and also not necessary if you report the full 1099-C amount as taxable income. Hope this helps :)
I did a deed in lieu in 2016. Do I fill out the 982 as insolvency or principal residence indebtness?
Did you receive a 1099-C?
Yes
If you received a 1099-C, you need to address it on your tax return so yes, you need to fill out the 982 if the debt was for your principal residence or you were insolvent. Please see the video for instructions on how to do either method. Which one you use depends on what the cancelled debt was for... your principal residence or other debt.
I receive SSDI and SSI. I received 1099C for canceled student loan debt. When I fill my Form 982, am I supposed to attach a 1040 also? In order to fill the “taxable income” section of 1040? Or do I just send 982 and Insolvency Worksheet?
Yes, because the 982 does not have a signature line, you'll need to send the 982 attached to a signed 1040.
The Tax Lady LLC Thank you for replying.
So last year (2018) we settled on two credit cards that were in wife's name only. We received two different 1099-Cs from the two credit card companies with two different discharge dates. One is dated 3/20/2018 and the other one 7/15/2018. So if we are working the insolvency work sheet which retroactive date do we use when it comes to listing our debts, March or July 2018? How do we address both the dates? Again please keep in mind the 1099-C forms were only issued in my wife's name. Can we include debts that were in my name only in the insolvency worksheet since we file joint taxes? Your feedback will be highly appreciated. Thank you.
Hi! I'd like to point out for everyone that the video and this comment section answers most questions. However, it's worth repeating: if you have more than one 1099-C, you need to complete an insolvency worksheet for EACH one, using the date to figure out how much you owed/owned on that day. Do the first dated one first. If you are insolvent for any amount of the first 1099-C, make sure you deduct that amount from the second worksheet's asset section. Regarding your second question, if only one of you was responsible for the debt, then use only that person's debts/assets on the worksheet. :)
@@TheTaxLadyLLC Thank you so much for your response. I tried doing the insolvency worksheet using only my wife's debts and assets and unfortunately she was not insolvent because she has a lot in her 401K and that makes her assets greater than her debts. However if I add my debts and assets (credit card balances and I have very small 401K account) that renders us insolvent. Since we have always joint filed our taxes, anyway possible I could add my debts and assets to the worksheet? Please let me know. Thank you.
Technically, if she was solely responsible for the debt then you can only include her information on the worksheet. If you were responsible in anyway, then yes, you can include your information. Here's something you can try: go through her retirement plans to be sure you have to include them. There was a court case (Schieber, et ux v. Commissioner) that concluded "defined benefit plans" do not have to be included as an asset on the worksheet. Defined benefit retirement accounts cannot be converted to a lump-sum amount, cannot be sold, and cannot be borrowed against. If any of her retirement plans are of this type, you can remove them from the worksheet and recalculate. Hope this helps.
@@TheTaxLadyLLC Thank you so much again for your response. So my wife's 401K balance around the time the debt was discharged was $83K. My wife is not 59 and half years yet so therefore cannot withdraw 100% of her 401K balance. At that time she could only withdraw $23K and borrow up to $42K. She has no other benefits or cash value life insurance. So which of the three 401k numbers $83K, $23K or $42K should I be putting in the worksheet against her 401K balance? Also I should have mentioned that I live in Texas which is considered as a community property state where debts incurred by one spouse automatically becomes a debt owed by both. Please let me know if this changes anything if that qualifies me to list my debts in the insolvency worksheet? Again thank you so much for your help.
I am understanding you to say that at the time of the debt cancellation, she could receive $23k AND a loan for $42k. So that's $65k she could get at the time, is this correct? If so, then the number you put on the insolvency worksheet is $65k. But if you are saying she could receive $23k OR a loan for $42k, then use $42k. I understand you live in a community property state, but it's my understanding that even in community property states a loan signed by one spouse is not the responsibility of the other. If you know for certain that you were responsible for the debt, then yes, you can include your info.
Is there only one 1099 C or is there 1099 A-Z???
1099 C is the form used to report debt forgiveness to the IRS. Yes there are other 1099 forms, which are used to report other types of income.
Hi Kay, thank you very much for your very informative video. There is no out there like it! I have completed the form 982 and just wanted to expertise advice. I have rec'd a proposed amount due from the IRS re: 1099-C due to an auto repo in 2000. I never rec'd the 1099-C from the creditor. Nonetheless, I am claiming insolvency. From line 38 of the insolvency worksheet (this amount is much higher than the amount of the cancellation of debt). I entered that amount on Line 2 (Form 982) and checked box 1b. I then entered the same amount on line 10a. Does that sound like I done this correctly? Please advise and thank you for you time and expertise. Much appreciated.
Hi Scherri! Everything sounds correct except I'm not clear what amount you put on line 2? I think you're saying that you put the amount from the 1099-C on line 2, but I'd like to be sure. Thanks!
@@TheTaxLadyLLC Hi Kay, thank you for your prompt response! 1099-C: $5158, Insolvency Worksheet - Line 38: $31,208. I entered $31208 on Form 982 Line 2 & Line 10a ?
@@scherrinealy7127 You put $5158 on line 2 and 10a
@@TheTaxLadyLLC Awesomw! Thank you so much! I appreciate your help!
@@scherrinealy7127 Welcome :)
Hello, Just came across your video and it helped a lot. What if a spouse has no income but received a 1099c. We don't live in a community property state and the only asset both names are on is a retirement account. We also file jointly, do we have to file the 1099c.
Regardless of whether your spouse has income or not, if you file a joint return, you must address the 1099-C on the tax return ... Did your spouse complete the insolvency worksheet yet? Do you know if s/he was insolvent or not? If not, you do have the legitimate option of filing separately if that makes the tax situation better.
Thank you for that quick response, I appreciate it. We did fill out the work sheet, we are confused about interest on pension or retirement. Should she claim half or is it the interest from this year only. Lot of confusing information. Trying to find a good example. Thank you again.
Yes, the worksheet is confusing! By "interest in pension plan," they are not referring to how much interest it has earned... they are asking how much money you have in the pension plan, total. And yes, you can list half for your spouse's share.
Thank you. If I had amended the return and sent for 2017 due receiving the 1099c late so I sent in amend with out the 982 can i send in my 982 now and have it count for my insolvency to my amended
Hi, I'm not understanding your question, can you please clarify what you mean? Thank you.
@@TheTaxLadyLLC I think the question the person is trying to ask is: Can form 982 be sent alone and will it count for insolvency after having the Tax Return amended and sent by it self?
Hi Vicky - great attempt! Even if you're wrong, I will answer cause this is a question that has not been asked before, lol!
If you receive a letter from the IRS about a 1099-C, and the only change to the return is a Form 982, you can send Form 982 alone in response to the letter. However, if you filed an original return without Form 982 and then later filed an amended return, also not attaching Form 982, you will need to file another amended return and attach Form 982. Here's an excerpt from the IRS's Form 982 instructions: If you filed your tax return without attaching Form 982, you can still make an election by filing an amended return within 6 months of the due date of the return (excluding extensions). Write “Filed pursuant to section 301.9100-2” on the amended return and file it at the same place you filed the original return.
I will say that I have helped several people send in a Form 982 well after the six month period and it has been accepted by the IRS. Hope this clears things up for LNK INC! Thanks again Vicky.
@@TheTaxLadyLLC No, thank you for all the help you are giving us. You are amazing! Thanks again.
One more question: As an SSDI/SSI recipient, am I supposed to add the amount of SSDI I received in 2017 in the 1040 Line 20a? Or do I leave it blank and just put $0 in Line 21 Other Income? Or both?
Since social security is your only source of income, it is not taxable and so, if you were fully insolvent at the time of debt forgiveness, just put zero on line 21.
The Tax Lady LLC Omg. That’s what I did. Wasn’t sure. Thank you. I now have confidence with my submission. Again, many thanks for your video and help.
One more thing: On form 982, please be sure to complete either line 10a or 10b -- my video does not say this. Whatever you put on line 2, put on line 10a or 10b, whichever applies. You do not need to include your insolvency worksheet(s).
if you have muliple 1099-c's how do you handle this?, Do you submit multiple 982 forms ?
No, but you do complete multiple insolvency worksheets, one for each date of debt forgiveness. I hope you will take the time to read through the comments... others have asked the same question and you may find the discussions informative. Thank you for watching!
What about repo? Bank sent me a latter say they’re going to file a 1099-c.. Anyone have an answer?
If you receive a 1099-C, you'll want to see if you qualify for insolvency. Please see the video for how to do that.
The Tax Lady LLC I already filed my taxes. Will this effect my return and I will see?
The IRS will likely process the return you filed as you filed it... and then later, if they catch the missing 1099-C, they will send you a letter asking you to address it.
You can amend your return to include it though
The Tax Lady LLC okay got chu.. your so helpful!! Thank you
thank you!
What about a debt from 20 years ago? I had debt insurance in case I lost my job. Well I lost my job and sent in all the paper to file a claim. That was the last i heard about it. I never got any more statements or anything. I thought the debt was gone. NOW...20 YEARS LATER... a collection agency is saying that I have to pay the balance. When I told them I lost my job and I filled out the credit insurance...they replied that I still needed to pay and said "WE KNOW WHERE YOU LIVE" then hung up on me. THEY KEEP CALLING ME TRYING TO COLLECT A DEBT FROM 20 YEARS AGO. CAN THEY DO THAT? I Never heard of this company before and they keep harrassing me. They called today and said something about filing a 1099. I couldnt really hear what the guy said cuz he talked so low and he left a message on my voice mail. Any help or advice would be greatly appreciated. Thanks.
What is also funny is they NEVER SEND ME ANYTHING IN THE MAIL....NO FORMS...NO BALANCE...NO NOTHING. Im not going to pay for a debt that should had been cancelled 20 years ago. Im also not just going to pay some yahoo over the phone. Dont you think they would have sent me some paperwork or SOMETHING in the mail to my address with their name on it? Thanks.
He also said something about court....but they called 6 months ago about going to court, AND NOTHING HAPPENED. NO COURT SUMMONS...NO COURT DATE...NO PAPERWORK SENT TO MY HOUSE. All I keep getting are threatening phone calls but NO LETTERS OR ANYTHING IN THE MAIL. THEY ALWAYS WANT ME TO PAY OVER THE PHONE. IF IT WAS A OUTSTANDING DEBT....WHY WAIT 20 YEARS TO TRY AN COLLECT? WHY DIDNT I HEAR ANYTHING ABOUT THIS 10 YEARS AGO? WHY NOW? Like Judge Judy always says " If it doesnt make sence...THEN ITS NOT TRUE". AND THESE PEOPLE CALLING MAKE NO SENSE. LOL. Thanks for any advice you can give. Ps. I did subscribe to your channel. You appear to be honest and kind. Thanks. :0)
Hey. Parts of what your saying makes me wonder if the phone calls are legit. There are so many scams out there to steal your identity, and some of them involve the kind of harassment and threats you've mentioned. So please, don't give any personal info to them. I'm not an attorney, nor am I an expert at debt collection, but it does seem like there is a "statute of limitations" on how long a company can attempt to collect. For example, the IRS has 10 years to collect from someone who has filed a tax return with a balance due. Perhaps you can get a consult with an attorney or an expert in the field to learn more. In the meantime, perhaps do not engage in conversation with these people anymore. Block their calls or simply hang up when you realize its them. Best wishes to you. :)
I am new to your site, so I have a couple of questions. In an insolvency due to a forclosure in 2018, which boxes do I check on form 982? Do I check 1. b and e, then put the amount in 2 and then go to Part ll 10a put the amount in and then attach the Insolvency Worksheet to my amended 1040X? I appreciate any help you can give me.
Hi, I apologize for the delay. Seems that I sometimes receive notifications from youtube and sometimes don't. :( If you foreclosed on your home in 2018 and, after completing the insolvency worksheet, you determined that you were insolvent, then you check box 1b, put the amount of insolvency (no more than the amount shown on your form 1099-C) on line 2, and then put that same amount on line 10a. Hope this isn't too late to help :)
Thanks a lot, very helpful!!!
Thank you!!!!!!
I received a 1099-C 2015 for cancelled credit card debt. The date on the 1099 shows 12/30/15, but the debt was actually cancelled in January, 2013. I know I can prove full insolvency in Jan 2013, but my financial situation has improved a little and I might only be partially insolvent in Dec, 2015. Do I have to use the date on the 1099? Why do they wait two years to mail it?
+Gail Scarfino I apologize for not replying sooner... i am new to this format and still learning how it works. If you believe the lender made a mistake on the form, you can ask them to correct it. But yes, you do have to determine insolvency as of the date on the form they submitted to the IRS.
Hey! I'm just a tad confused maybe someone can help clarify. I got a few 1099 c's and will be claiming insolvent. I don't own a home or car. The 1099 c's are for credit card debt. I understand the insolvency worksheet and part 1 of form 982. I saw in the video it says to check line 1b and put the amount in line 2. And that's it. Unless I missed the part about also putting the amount in line 2 in line 10a in part 2. Did I miss that part? I saw someone ask the same question in the comments and they were told yes to answer line 10a as well. Do we fill in line 10a or not? I watched the video a few times and maybe I'm missing the instruction idk lol any help would be awesome yall thank you
Hi, thank you so much Ariana, you are correct... the video is missing details on how to complete Part II, but it is mentioned here in the comment section. On form 982, if you check box 1b, the amount you put on line 2 is also put on line 10a. If a person checks box 1e, it goes on line 10b. Basically, you are telling the IRS that, as of the date of debt forgiveness, you will consider your belongings/assets to be worth less than they were before debt forgiveness. What you put on line 2 is how much less your assets are worth. If you valued your belongings at $5k and the amount you put on line 2 is $1k, you will now consider the value of your items to be $4k. Effectively, you are saying (a) you will keep this in mind when taking tax deductions if you donate personal items and (b) you will pay taxes on any future gains from selling your belongings. I appreciate you bringing this up and I'm sure others will find your question helpful :)
Hello.. I received 1099-c for some charged off CC debt and I included F-982 in my tax returns in 2017 and 2018. I came out of the debts this year and willing to buy a home. Living in an apartment is becoming challenging as kids growing up. Will this a concern for me not being eligible for applying a mortgage loan? please let me know. Thank you
Hi, I wouldn't think so.
New here, I already filed my taxes, I didn't know I was going to receive this 1099c what should I do.
Please follow the instructions in the video to determine if it's taxable, partially taxable, or not taxable and then amend your return. If you need assistance amending your return, you can hire me or someone in your area to prepare one.
I got one for a home that my ex-husband and his wife live in!
I have been divorced from him for 20 years!
Wow! Whose social security number is it reported under? Who is the owner of the house? Is your name still on it?