1099-C's, IRS 982's and TurboTax?

[DirkDiggler]

Thought I was gonna be safe after Feb 1st but then yesterday I got a 1099-C on my short sale of my house that was included in my Ch7. I have been using TurboTax the past few years to do my taxes....they have a section for 1099-C's and there is a question about whether the cancellation of debt was included in a bankruptcy (which I checked the box yes) but I'm wondering if TurboTax will generate a IRS 982 form when filing, or will I have to make it and how do I go about it if I file electronically? Any suggestions? Thanks!

[bcss]

I don't know about Turbo Tax, I used Tax Cut last year when I got the 1099s. Tax Cut doesn't produce it automatically, just went to the form and filled it out manually. eHow has an article on how to fill it out. I ran it my a accountant relative and they were fine with it. Also advised me to include a copy of the 1099s with my return. I did a paper return.

[HHM]

Don't know, but I would imagine if the software asked the question about BK, it is because it was looking to prepare the 982. All you can do is finish doing your taxes and then review the forms to be filed and see if it is in there.

[LadyInTheRed]

Turbo Tax didn't used to have form 982, so you had to do what bcss suggests.

But, it now appears it does have form 982, but will only work if you receive 1099-Cs for only one kind of debt. http://turbotax.intuit.com/support/i.../GEN12661.html

If you get one 1099-C for a mortgage and one for credit card debt, you will have to prepare your return as if you didn't receive a 1099-C, download form 982 from the irs.gov and file your return by mail.

[chicagoed195]

If all of the debt for which a 1099C was received was discharged in a Title 11 case, then one Form 982 would suffice. You would not use the qualified principal indebtedness rule, if it was discharged in a Title 11 case.

[LadyInTheRed]

If all of the debt for which a 1099C was received was discharged in a Title 11 case, then one Form 982 would suffice. You would not use the qualified principal indebtedness rule, if it was discharged in a Title 11 case.

That may be the case. But, according to TurboTax Support, if you have 1099C's for two or more types of debt, "TurboTax does not support that tax situation." If you only have to complete Part 1 of form 982, you could fool the software by not telling it multiple 1099Cs are for different types of debt.

[DirkDiggler]

Hmm, so it appears that Turbo Tax will work in my situation....I only received one 1099-C, for my mortgage....so I guess I'll give it a shot and see if TT includes a 982 in the filing We owe this year due to no mortgage interest, so I won't be filing until early April so I have time to figure it out LOL

Speaking of that, can you file state tax returns prior to federal? We have about a $700 refund coming from the state but owe federal $1100, would be nice to get the state refund to pay the federal LOL

[chicagoed195]

LadyInTheRed - my point exactly. You don't have two different types of debt. It is all chapter 11. Check box 1a and put the total in on line 2.

[walkthaplank]

What is the deadline for a creditor to send you a 1099c? I would like to file my taxes but BofA "forgave" my discharged 2nd mortgage. I haven't received a 1099 from them, but I have received a 1098 for mortgage interest paid last year. Am I safe to file my taxes now or should I wait? How long should I wait? Calling BofA and getting answers as to whether or not they issued a 1099 is a lot like calling the DMV... only there is a chance somebody at the DMV will answer the phone.

ETA, found the answer for my situation online. For anybody else who has discharged their BofA loan that was later forgiven, this is from BofA's website.

13. Will a customer benefit if their second lien mortgage debt has been discharged in a bankruptcy filing?

Yes. While customers who have filed for bankruptcy and receive a discharge of their second lien mortgage debt obligations are no longer personally liable for the debt, the bank still remains a lien holder to the extent of the remaining balance on the second lien. This means the bank still has a legal claim to the customer’s property as collateral to satisfy the second lien mortgage debt still owed through a court-approved foreclosure, or if the property is sold for a gain. Once the debt is cancelled and the lien extinguished or released (subject to court approval, if required), the bank relinquishes any further monetary or collateral claim to the property. This reduces the debt attached to the property and may provide the opportunity for the borrower to build equity in their home. Because the underlying personal obligation for the debt was discharged in bankruptcy, the bank will not report debt forgiveness to the IRS as a result of this transaction.

[tobee43]

What is the deadline for a creditor to send you a 1099c? I would like to file my taxes but BofA "forgave" my discharged 2nd mortgage. I haven't received a 1099 from them, but I have received a 1098 for mortgage interest paid last year. Am I safe to file my taxes now or should I wait? How long should I wait? Calling BofA and getting answers as to whether or not they issued a 1099 is a lot like calling the DMV... only there is a chance somebody at the DMV will answer the phone.

most likely if you rec'd a 1098 from them this year, there is a good chance you will not be rec'ing any 1099 A or C. there really is no deadline, since actually they can wait a couple of years and then send you 1099. one needs to remember these 1099's are really more for the creditor to claim the loss to the irs, they usually can take when their books say too...LOL! scary, and then in bk cases where they are no tax liability to the debtor, it's really not that big of deal.... the worse scenario is you file an amended return.