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      • Determine if the forgiveness of your debt is related to a qualifying event. ...
      • Check the appropriate box in Part I - General Information of Form 982, typically either "Discharge of indebtedness in a title 11 case" or "Discharge of indebtedness to ...
      • Input, on line two of Form 982, the total amount of forgiven debt you wish to exclude from income. ...
      • Input, on Part II - Reduction of Tax Attributes, the amount from line two onto line 10a, "Applied to reduce the basis of nondepreciable and depreciable property."
      • File Form 982 with your Form 1040, U.S. Individual Income Tax Return, for the tax year in which your debt was forgiven.
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  2. What if my debt is forgiven? | Internal Revenue Service

    www.irs.gov › newsroom › what-if-my-debt-is-forgiven

    May 04, 2021 · The tax impact of debt forgiveness or cancellation depends on your individual facts and circumstances. Generally, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

  3. Topic No. 431 Canceled Debt - Internal Revenue Service

    www.irs.gov › taxtopics › tc431

    In general, if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable and you must report the canceled debt on your tax return for the year the cancellation occurs. The canceled debt isn't taxable, however, if the law specifically allows you to exclude it from gross income.

  4. Publication 4681 (2020), Canceled Debts, Foreclosures ...

    www.irs.gov › publications › p4681

    This publication explains the federal tax treatment of canceled debts, foreclosures, repossessions, and abandonments. Generally, if you owe a debt to someone else and they cancel or forgive that debt for less than its full amount, you are treated for income tax purposes as having income and may have to pay tax on this income.

  5. The Truth About Debt Forgiveness | US News

    creditcards.usnews.com › articles › the-truth-about

    Feb 17, 2021 · At this point, your credit card company has sold your debt to a collection agency, so that's whom you'd be negotiating with. You reach an agreement with the debt collector to pay back $10,000 in a...

  6. 1099-C surprise: Canceled debt often taxable as income ...

    www.creditcards.com › credit-card-news › forgiven

    Feb 25, 2021 · It is, according to the Internal Revenue Code. For example, a person with $10,000 in credit card debt who negotiates to pay only $6,000 of the balance would have $4,000 in forgiven debt income. That $4,000 must be reported as “other income” on Line 21 of the 1040 tax form.

  7. How Credit Card Debt Forgiveness Works: Tips & Stats

    wallethub.com › edu › credit-card-debt-forgiveness

    Apr 13, 2020 · Approaches to Credit Card Debt Forgiveness: Reach a debt settlement agreement: You negotiate with your credit card company to decide on an amount you’re able to... Wait out the statute of limitations on credit card debt: You can beat a lawsuit for the debt and avoid paying if the SOL... Consolidate ...

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