Vic Dura <vpdura[at]XXXhiwaay.net> writes:

- quote -

You may have just given an example. The cancelled debt is
not income if the debtor was insolvent at the time the debt
was cancelled.

Phil Marti
Topeka, KS

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- quote -

Never mind. I found it in Pub-17 under "Cancellation of Debt".

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- quote -

Thanks to all who suggested that I verify that the debt
cancellation is taxable. I didn't know there could be
exceptions. I thought all debt cancellation was taxable.

Here's more information: The question relates to a TCE
"client" that came to my site with a 1099-C for cancellation
of credit card debt. There was no bankruptcy involved. She
said that she didn't have the money to pay the debt (this is
a hard luck story) and thought that the CC company just got
tired of trying to get blood from a stone.

Could someone tell me where to read about or give me an
example of canceled debt that is *not* taxable?

Thanks.

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Vic Dura wrote:

- quote -

Right.

but first be sure the amount is indeed taxable; there might
be an exception.

Cheer$,
Harlan Lunsford, EA n LA

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"Vic Dura" <vpdura[at]XXXhiwaay.net> wrote:

- quote -

Line 21 Other Income is the right place. Label it as
Cancellation of Debt and put in the amount from the Form
1099-C.

Wayne Brasch, CPA, M. S. Taxation

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Vic Dura <vpdura[at]XXXhiwaay.net> writes:

- quote -

Possibly. Turn it over and look at the back.

Phil Marti
Topeka, KS

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"Vic Dura" <vpdura[at]XXXhiwaay.net> wrote:

- quote -

That is where it would go, if it is taxable.
Are you sure it is taxable?

Gene E. Utterback, EA

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Can anyone tell me where to declare income reported on a
1099-C (cancellation of debt)? I'm thinking form 1040/line
21. Is that correct?

Thanks for any help.

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