Whether you’re an experienced do-it-yourselfer or doing your own taxes for the first time, this is your place to learn and share. Here you’ll find information and resources for using H&R Block’s online and software DIY solutions. You’ll also find links to more information to assist you on your DIY journey.
03-12-2018 09:15 PM
Hi, Usually my taxes are pretty simple but this year has been different. Was hoping for some help to the following if anyone might be able? I live in Michigan if that makes a difference as well. Thank you.....
1. I have two 1099-C for cancelled student loans. They were just cancelled due to default and not because of employment. I know I need to fill out the Form 982 but was curious to how it should read? The student loans were entirely in my name, however I am filing a joint tax return with my wife? The house is entirely in her name (title and mortgage) and I really do not have many assets outside of household items. No 401K, stocks, etc. I also am in year 5 or so of a Chapter 7 bankruptcy. I was wondering if I need to include my wife's assets when I break down the worksheet? Or should I just use mine? I have over $100k in other student loans so I think I should be ok for insolvency if thats the case? I just am not sure how to present it and mail it (do I need to mail worksheet and Forms separately from submitting taxes online)?
2. Also, as I am just starting the process should I buy a specific HR software at the store or would maybe the online website work ok? I have read where the forms needed (982) might not be available in some versions?
Thank you very much for the help, Rob
03-16-2018 03:42 PM
Some background: the 1099-C’s that you received create income that is taxable to you. You may be able to exclude that income from your taxable income by claiming a number of exemptions. One of those exemptions is Insolvency. These exemptions are reported on Form 982.
Insolvency is a common exemption. In order for you to qualify for claiming the insolvency exemption, your total assets at the time right before the forgiveness of the loan must be less than the total amount of debt you had at that same time. There is an insolvency worksheet that the IRS has published in order to help you figure out whether or not your total debts at that time are in fact, greater than your total assets.
Here is a link to that sheet, and the IRS publication that deals with discharge of indebtedness: https://www.irs.gov/pub/irs-pdf/p4681.pdf page 6 – insolvency worksheet.
When calculating your total assets, because you are married and filing a joint return, you should include all of your wife’s assets as well.
As far as which type of software package is best for you Rob, You have two choices, using our online programs, or using the downloadable software.
If your only concern is the form 982, the Deluxe version of the online software includes form 982.
The basic version of the downloadable software also includes form 982.
However, if you need to file a Michigan state tax return as well, then the deluxe version of the downloadable software is probably the way to go.
I hope that answers all of your questions Rob, if you have any other questions I am happy to help,
Tax research Specialist