Please see How do I amend a 2016 return in TurboTax? for detailed instructions. You will need to print and mail your2016 amended tax return (1040X). Is canceled, forgiven, or discharged debt taxable?Canceled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception, defined below.Normally the debt is reported on Form 1099-C. Make sure to enter your 1099-C in TurboTax so we can figure out it qualifies for an exclusion or an exception.Tip: If a creditor is still trying to collect on your debt, it's not considered canceled, forgiven, or discharged, which in turn means there's nothing to report – even if the creditor sent you a 1099-C.ExclusionsDebt canceled in a Title 11 bankruptcyDebt canceled during insolvency (the amount exceeding your assets)Cancelation of qualified farm or real property indebtednessCancelation of qualified principal residence indebtedness, better known as mortgage debt reliefIf your debt qualifies for any of these exclusions, TurboTax will complete Form 982 and include it with your return.ExceptionsCertain qualified student loansMoney excluded from income by law, such as gifts or bequestsCanceled debt that if paid by a cash-basis taxpayer would otherwise be deductibleA qualified purchase price reduction given by a sellerAny Pay-for-Performance Success Payments that reduce the principal balance of your mortgage under the Home Affordable Modification ProgramRelated Information:What qualifies for mortgage forgiveness debt relief?How do I enter a 1099-C?Can I exclude my 1099-C from my taxable income?[Edited 3/7/2020 | 9:22 PST]

Question

How do I amend my 2016 taxes to claim an exclusion for cancelation of debt income on my home?

Forum|Forum|6 years ago
March 1, 2020
1 reply
0 views

No text available

D

DanaB27

Please see How do I amend a 2016 return in TurboTax? for detailed instructions. You will need to print and mail your2016 amended tax return (1040X).

Is canceled, forgiven, or discharged debt taxable?

Canceled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception, defined below.

Normally the debt is reported on Form 1099-C. Make sure to enter your 1099-C in TurboTax so we can figure out it qualifies for an exclusion or an exception.

Tip: If a creditor is still trying to collect on your debt, it's not considered canceled, forgiven, or discharged, which in turn means there's nothing to report – even if the creditor sent you a 1099-C.

Exclusions

Debt canceled in a Title 11 bankruptcy
Debt canceled during insolvency (the amount exceeding your assets)
Cancelation of qualified farm or real property indebtedness
Cancelation of qualified principal residence indebtedness, better known as mortgage debt relief

If your debt qualifies for any of these exclusions, TurboTax will complete Form 982 and include it with your return.

Exceptions

Certain qualified student loans
Money excluded from income by law, such as gifts or bequests
Canceled debt that if paid by a cash-basis taxpayer would otherwise be deductible
A qualified purchase price reduction given by a seller
Any Pay-for-Performance Success Payments that reduce the principal balance of your mortgage under the Home Affordable Modification Program