In general, you must report any taxable amount of a canceled debt as ordinary income from the cancellation of debt on Form 1040, U.S. Individual Income Tax Return, Form 1040NR, U.S. Nonresident Alien Income Tax Return, if the debt is a nonbusiness debt, or an applicable schedule if the debt is a business debt. There are exceptions to the reporting requirement and we will review Form 982 and the exceptions.
In this webinar replay, Kristy provided an overview to the business and non-business cancellation of debt and how it impacts the tax return.
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