Cancellation of debt and form 982

Forum|Forum|5 months ago
February 5, 2026
1 reply
9 views

Seeking advice, how to handle this situation.

TY 2023, client received a K1 (1065) showing box 1 = $105,000. 2023 TY filed and paid.

He recently received a letter from the CPA firm that prepared the K1 saying Box 1 of the 2023 K1 included a cancellation of debt of $214,000 (his share of $4M cancellation). Client never received a 1095-C. Client completed the insolvency worksheet which shows a net insolvency of $100k. CPA firm is refusing to send out amended K1’s, stating the letter is sufficient for the taxpayer to file an amended personal return.

Question: How should I proceed? What is the appropriate method of accounting for the $100k reduction in income? Appreciate any insight!

TIA

ProSeries Basic

Best answer by sjrcpa

Not great work on the part of the CPA firm. They probably can't amend and would need to do an AAR which is a pain. There is a separate line and Code on the K-1 for COD income which they should have used.

I guess you could amend and attach a Notice of Inconsistent Treatment Form 8082.

sjrcpaAnswer

Level 15

Not great work on the part of the CPA firm. They probably can't amend and would need to do an AAR which is a pain. There is a separate line and Code on the K-1 for COD income which they should have used.

I guess you could amend and attach a Notice of Inconsistent Treatment Form 8082.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded