California discharge of indebtedness

Anyone else having issues with Lacerte recording California principal residence discharge of indebtedness and having it correctly show up as taxable? I am getting Federal and State non-taxable result when it should be taxable in California.  

Answer

1 person found this helpful

It's working fine for me. 

Input screen 14.1 under cancellation of debt (1099C) and then use the appropriate amount for Qualified principal residence exclusion.  This puts it on page 1 of the 1040 and then adds it back to CA on Form CA540 and even references it as Mort Debt Excl.  If you have insolvency then you need to include Form 982 and an insolvency worksheet with the CA return.

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