Question
Cancellation of Debt
Single client has $65k in income.
Client expects to get a 1099-C for cancellation of $25,000.00 in debt.
I did a sample tax return, entering $25K on line 2 (Amt. of debt discharged) on the 1099-C form.
Doing so increases client tax liability by approx. $4600.
I understand that using Form 982 will reduce client's liability. However, I'm unable to generate the reduction....not sure what I need to fill out.
How do I use form 982 to reduce client's tax liability?
Thanks in advance,
Michael De Freitas
