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Cancellation of Debt

 

 

Course Year: 2013
Course Level: Basic
Prerequisite: None
Advance Preparation: None
Delivery Method: Self-Study

CPE Credits Designation Field of Study
IRS * 2 EA Federal Tax Law Topic
NASBA 0 CPA N/A
CTEC 2 CRTP Federal Tax Law Topic
CFP Board 0 CFP® N/A

 

* NATP will report CPE credits to the IRS for all PTIN holders. CPE is currently not mandatory for RTRPs or RTRP candidates and any option to register or participate in this program is strictly voluntary.

 

Fees: $46 for Members and $56 for Nonmembers

Summary

In a recession many taxpayers find themselves unable to repay home mortgages, credit card debt or other personal or business loans. If the creditor cancels the debt, the debtor may or may not have to recognize income. This course guides the tax professional through the rules for including or excluding income from cancellation of debt on the debtor’s tax return, and explores the effect of excluding cancelled debt on the taxpayer’s other tax attributes.

Objectives
Upon completion of this course, the tax professional will be able to:

  • Determine if debt is recourse or nonrecourse.
  • Identify the date a debt is cancelled.
  • Identify when creditors must issue Form 1099-C.
  • List when debtors must report debt discharge income.
  • Apply relief provisions to debtors’ tax returns.
  • Determine if a taxpayer is insolvent.
  • Complete a Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).
  • Recognize how tax attributes are affected by discharged debt.
  • Describe the effects of cancelled debt of partnerships, S corporations and estates.

For more information regarding refund, complaint and/or program cancellation policies, please contact our Member Services Department at 800.558.3402, ext. 3.

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PO Box 8002, Appleton, WI 54912-8002 Phone: 800.558.3402 Fax: 800.747.0001

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