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ProSeries Form 1120S Cancellation of Debt

mcardon2
Level 1

Debt was cancelled but no 1099-C was issued. Where is this reported on Form 1120S? Also, how do I generate Form 982?

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7 Replies 7
MBuck
Level 1

I have the same question.  How was this handled?

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ASpey
Level 2

Same question here.  Sec 108 says the s corp should file a 982 but it isn't in the tax program.

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sjrcpa
Level 15

If it's taxable, report as Other Income.

If not taxable report on 982 and as a book tax difference on M-1.


ex-AllStar
ASpey
Level 2

It is discharged debt due to a bankruptcy.  From reading Sec 108, I need to reduce tax attributes based on the COD excluded from income.  Thay have an NOL for 2020 and also a carryforward NOL from this business on their personal return.  My thought is they should not be able to take the current year's loss or the carryforward losses since the COD is more that both of those.

 

Also, will the IRS not be looking for the 982?  I'm not able to find the form in Proseries.

Thanks!

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MBuck
Level 1

Intuit told me the Form 982 must be filled out manually and attached to the Form 1120S as a PDF.

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ASpey
Level 2

So then how would I account for reducing the tax attributes?

If the tax attributes are supposed to be reduced on the corporate level, then the K1 should not show the loss.  Is that correct?  I have a client with $680,000 of debt discharged and a current year loss of $150,000. Also, the carryforward loss on their personal is $130,000.

 

Based on the rules for reducing tax attributes, I don't think they should be able to use those losses.

 

 

 

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sjrcpa
Level 15

Recheck those rules. I think you'll find the tax attribute reduction occurs on Jan 1 of the next year.

Also, an S Corporation doesn't have NOLs, unless they arose in years when it was a C Corp.


ex-AllStar
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