Support CenterHow do I report Cancellation of debt reported on Form 1099-C when using SureFire?
🔍 How do I report Cancellation of debt reported on Form 1099-C when using SureFire?
Cancellation of debt income has many factors that determine whether or not the income is taxable. Because of this, Form 1099-C for cancellation of debt is not currently in the SureFire system.
We recommend that the preparer visit the IRS website and research when and how to report cancellation of debt based on each taxpayer situation.
⚠️ Before You Begin
Before reporting, review the taxpayer’s situation to determine whether the cancellation of debt is taxable and where it should be reported.
📊 Where to Report Form 1099-C Cancellation of Debt in SureFire
Use this when you need to know where the amount from Form 1099-C should go on the tax return.
Step 1: Identify the amount from Form 1099-C
Generally, data from a Form 1099-C, Cancelled debt (box 2) is reported on the appropriate Form 1040 line based on the tax year.
Step 2: Report it on the correct 1040 line by tax year
- 2017 and prior: Form 1040, line 21
- 2018, 2019, and 2020: Form 1040 Schedule 1 Line 8
- 2021: Form 1040 Schedule 1 line 8z, using Wkt 7
Important: As noted above, there are cases where this should be reported elsewhere, or not reported at all.
Step 3: Consider completing Form 982 (if excluding income)
If you are excluding income due to indebtedness reported on 1099-C, you may also want to complete Form 982.
✅ Note About Form 982
Form 982 is informational, and does not flow to any form in the return. It only shows the IRS the amount you have excluded from and income and the reason you excluded the income.
💡 Helpful IRS References
- For information on reporting debt cancellations, see the IRS Instructions for Forms 1099-A and 1099-C.
- For information on reporting cancelled debt from Form 1099-C, see IRS General Instructions for Certain Information Returns.
📞 Still Need Help?
If you are having trouble, contact our support team:
Phone: 1-800-516-9442
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