We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

Free Consult

Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

Pay Your CPA

Enter $ Below



Other Amount:



Your Email Address :



Insolvency CPA explains the Cancelled Debt exclusion process on Form 982 | Form 1099-C

Insolvency CPA Wilmington NC

Gary Bode, CPA: if you need help with Form 982, call for a free phone consult at 399-2705.

Hi, I’m Gary Bode, an insolvency CPA with a virtual office to help long distance folks deal with cancelled debt and Form 982. My physical office is in Wilmington NC.

What is Cancelled Debt?

Cancelled debt occurs when your financial institution “forgives” part of a loan. In 2012, typical scenarios include mortgage foreclosure, short sales, car re-possessions, decreased credit card payoffs, etc.

1099-C

The bank reports the amount of cancelled debt, and when it was cancelled, to both you and the IRS on Form 1099-C.

Cancelled Debt automatically becomes Taxable Income

If you do nothing, cancelled debt becomes taxable income on the company’s tax return or an individual’s Form 1040.

Form 982 to the Rescue

You have a right to prevent cancelled debt becoming taxable income by exempting or excluding it on Form 982. Cancelled Debt CPAs say excluding some cancelled debt is better than excluding no cancelled debt. How much tax liability can you save? A rule of thumb says 25% of cancelled debt excluded. Remember that’s rough figure for a complex calculation! The basic IRS guideline? You may exclude cancelled debt to the extent you were insolvent immediately before the debt was cancelled.

Insolvency CPA

Insolvency became a practice niche for CPAs a few years ago. Unfortunately, we’re still needed in 2012. The IRS means well on Form 982 but it covers multiple situations, and is tricky to navigate. And especially with companies, the insolvency calculation is only part of the tax preparation. Form 982 repercussions ripple though other areas of the tax return. Insolvency CPAs arose to handle this specialized tax snake pit.

Form 1099-C Precautions

  • Look for your Form 1099-C. Sometimes banks only mail a copy to the IRS.
  • Act on the 1099-C. Include it into your tax return. Not doing so guarantees an IRS audit.
  • Make sure the amount is correct. You have a right to understand how much the bank wrote off and how they calculated it. If you have trouble getting an answer, calling an insolvency CPA, or perhaps an attorney, is prudent.
  • Make sure the date is correct. Often banks use December 31st, perhaps for convenience. But the Form 982 calculations are based on the actual date. If you had a short sale in February because you were insolvent, maybe you’re not as insolvent on December 31st, so less cancelled debt can be excluded.

Can I amend my past Tax Return if I didn’t use Form 982?

Yes, up to the IRS time limit.

I’m an insolvency CPA because the IRS rightfully allows some relief from cancelled debt taxation but makes the Form 982 process so complex. For a free phone consult, call (910) 399-2705.

1 comment to Insolvency CPA explains the Cancelled Debt exclusion process on Form 982 | Form 1099-C

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>