Greg was released from his obligation to pay $5,000 of personal credit card debt. The credit card company sent Form 1099-C showing cancelled debt of $5,000. Greg is fairly certain he has more debt than he has assets.
Can the VITA/TCE site provide tax return preparation assistance to Greg?
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Yes, since the entire $5,000 in canceled debt is reported on the tax return as other income. |
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No, because it appears Greg is insolvent, which might mean some of the canceled credit card debt would be nontaxable and beyond the scope of the VITA/TCE programs. |
