Don’t let any cancelled debt become taxable income without exhausting every possibility on Form 982. (910) 840-3858.
Cancelled Debt and the infamous IRS Form 982, Reduction of Tax Attributes, became a sub-specialty for us during the Recession. Sadly we continue to see many IRS Form 1099-C(s), Cancellation of Debt, in 2014. Our virtual office allows us serve you regardless of you or your company’s location.
We have dozens of posts on Cancelled Debt. On the Forms list, in the right sidebar, click on 982, 1099-C or 1099-A. In the drop down Category list, in the left sidebar, click on Cancelled Debt or Insolvency. Some folks tell me these posts helped them understand the Form 982 instructions and/or IRS Publication 4681. But we ask you to note the disclaimers, the tax reporting rules for cancelled debt get complex.
You’ll see CPAs and other tax prepares in our Testimonials and post comments.
We handle most types of cancelled debt tax returns:
- Car re-possessions.
- Credit card cancelled debt, personal and business.
- Partnerships, Form 1065.
- Principal residence foreclosures.
- Principal residence loan modifications
- Principal residence short sales.
- Rental property foreclosures.
- Rental property short sales.
- S Corporations, Form 1120-S.
We handle Form 982, Reduction of Tax Attributes:
- Bankruptcy.
- Insolvency.
- Including the IRS Insolvency Worksheet.
- Qualified principal residence indebtedness.
- Qualified real property business indebtedness.
There’s more to Cancelled Debt than just Cancelled Debt
- With short sales, foreclosure and repo(s) you’ve got a sale of an asset.
- The tax attributes section of Form 982 kick in to further complicate the Gain or Loss calculation.
- The tax attributes section of Form 982 sometimes affect other assets you or your company own.
Cancelled Debt on Form 1099-C becomes taxable income unless you can exclude it using Form 982. So, $10,000 of Cancelled Debt could increase your tax bill by $2,500 to $3,000 +/-.
That’s where we come in. Form 982 is a snake pit, despite the best intentions of the IRS. If you become uncomfortable handling Form 982 yourself, it might pay to have a cancelled debt CPA specialist look at it.
You or Your Business aren’t Alone
Lots of folks got caught in a trap during the recession.
I’m a Cancelled Debt CPA. Read any of our postings to gauge how we approach this tax specialty. If you don’t have a local Cancelled Debt CPA, experienced with Form 982 preparation, consider giving us a call for a free phone consult at (910) 840-3858.
