Did you get any debts canceled or forgiven this year? You may need IRS tax form 982.
Claiming insolvency with form 982 can let you exclude debts from your taxable income because, yes, when you don’t have to pay a debt, the federal government calls that income.
Unless you follow the step-by-step guide from tax practitioner and certified financial planner Forrest Baumhover with Teach Me! Personal Finance. As a financial planner, Forrest has helped clients navigate complex tax situations for years, and his articles on tax topics help hundreds more.
So, if you received a form 1099-C during the year, watch this financial planner’s step-by-step instructions for form 982 so that forgiven debt doesn’t count as taxable income on your next federal tax return.
Markos M. Baños Cabán, Esq., is the Director of Resolutions at Community Tax LLC, where he leads a team of practitioners and service professionals dedicated to resolving complex tax conflicts, including IRS audits, tax liens, and tax debt. A licensed attorney, tax practitioner, and notary public in Puerto Rico, Markos combines his extensive legal expertise and management skills to deliver exceptional results and reduce stress for his clients. He holds a Juris Doctor from the University of Puerto Rico School of Law and has experience in a variety of legal fields, as well as industrial management. Bilingual in English and Spanish, Markos is also a published researcher with a passion for delivering outstanding service.
