Where can I report 1099-C for personal property cancellation of debt?

Solution

Follow these steps to report a 1099-C Cancellation of Debt:

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
  2. Scroll down to the Alimony and Other Income section
  3. Enter the "Cancellation of debt (1099-C)" code 6 under the Cancellation of Debt subsection (this amount is typically found on Form 1099-C, box 2. To verify, see the computation below.)


Follow these steps to figure the amount to enter in Step 3 above, Figure your portion of Cancellation of Debt (viewing your copy of Form 1099-C):

  1. Enter the total amount of the debt immediately prior to the foreclosure. _______
  2. Enter the fair market value of the property from Form 1099-C, box 7.  ________
  3. Subtract line 2 from line 1.  If less than zero, enter zero. _______

Note:  The amount on line 3 (of the computation) will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions;
 

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