Information for my accountant

[tpert]

So I gave all my normal paperwork for my income to my accountant and then I started getting 1099-C forms. I had forgotten these would be coming in.

So far they are all coded "A" in box 6, which seems right, but my accountant is asking me for the total amount of discharged indebtedness to be excluded from gross income. Is this amount in one of the filing pages or do I have to compute this.

I had IRS debt that was partially discharged and credit card debt that was fully discharged. I think my first and second mortgage seem to also have been discharged though I continue paying these without reaffirming them. I also believe that the student loan debt was unaffected.

He says he needs this for Form 982. Any thoughts as to where to find this number or how to compute it?

[justbroke]

I'm not a tax professional and your tax professional should have been able to answer that question.

The use of the word "discharged" in the statement "total amount of discharged indebtedness" is not referring to bankruptcy. It's referring to the fact that the debt was forgiven, no longer considered a debt, the obligation to pay was released.

Now, this means that the tax professional wants to know the total value of that debt. This is because a creditor could have only partially forgiven the debt. For example, you owe AMEX $100,000. You reach a settlement with AMEX and they forgive $90,000 if you paid $10,000. You pay the $10,000 and they send a 1099-C for $90,000. For what I know if this, the $90,000 is the amount forgiven, but $100,000 is the total amount of indebtedness.

Unless you have received a 1099-C, then I don't think you have to worry about other things.

You may be able to find the total amount that you owed the creditor on your forms (Schedule A-F). You basically need to find, for your tax professional, the total amount of the debt before it was forgiven. In your case, since it was a bankruptcy, I would assume that the total amount of the forgiveness is the same as the total amount of the debt. But remember that is my assumption. I assume this only in the context of a Chapter 7 as a Chapter 13 would have paid "something" towards the debt.