New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

Do I have to enter the 1099-C information if all canceled debt is excluded from income, or can I just use Screen 982 to produce the form?

Answer

If all of the canceled debt is excluded from income, you are not required to enter the information in Screen 1099C. To generate Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), all of the necessary fields are in Screen 982, located in the Other With Return folder. However, entering information in Screen 1099C is beneficial for the following reasons.

• UltraTax CS reports the amount of canceled debt and the amount of excluded canceled debt on the applicable form or schedule. This may prevent unnecessary matching notices from the IRS.
• UltraTax CS produces a Form 1099C Worksheet detailing the debt canceled and the reason it was not included in income.
• UltraTax CS produces Form 982 from data entry on Screen 1099C. However, when excluding canceled debt from income, there must be a reduction of tax attributes on Form 982. On Screen 982, enter the amount of debt you are excluding that applies to the available tax attributes in the Reduction of Tax Attributes data entry section, Excluded Gross Income column.

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