Comments on: If I go into a credit card relief program for a forgiveness of debt what will the tax form 982 do to help me? http://www.eliminatedebtdoctor.com/debt-discussions/credit-card-consolidation/if-i-go-into-a-credit-card-relief-program-for-a-forgiveness-of-debt-what-will-the-tax-form-982-do-to-help-me Find Out How To Pay Your Debt Smarter and Faster by Organize Your Bills & Optimize Your Payment. We Specialize in Eliminate Debt & Debt Consolidation. Tue, 07 Feb 2012 07:47:21 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: v b http://www.eliminatedebtdoctor.com/debt-discussions/credit-card-consolidation/if-i-go-into-a-credit-card-relief-program-for-a-forgiveness-of-debt-what-will-the-tax-form-982-do-to-help-me/comment-page-1#comment-5915 v b Sat, 26 Sep 2009 22:26:20 +0000 http://www.eliminatedebtdoctor.com/debt-discussions/credit-card-consolidation/if-i-go-into-a-credit-card-relief-program-for-a-forgiveness-of-debt-what-will-the-tax-form-982-do-to-help-me#comment-5915 When the debt is cancelled, you will get a form 1099-C for the amount you aren't paying. The IRS says to add this to your income. If you are in the 15% tax bracket and had $10K cancelled, you pay income tax of $1500. If you are either through bankruptcy or are insolvent, you use form 982 to POSTPONE the cancelled debt to a later year. For the totally broke, they may never include the money in income. For others, they will. If you aren't broke, you can't use the form. See irs pub 4681. When the debt is cancelled, you will get a form 1099-C for the amount you aren’t paying.

The IRS says to add this to your income. If you are in the 15% tax bracket and had $10K cancelled, you pay income tax of $1500.

If you are either through bankruptcy or are insolvent, you use form 982 to POSTPONE the cancelled debt to a later year. For the totally broke, they may never include the money in income. For others, they will.

If you aren’t broke, you can’t use the form.

See irs pub 4681.

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