--- name: form-1099-c description: > Use this skill when an individual taxpayer has received a Form 1099-C (Cancellation of Debt) from a creditor and needs to determine whether and how to report the canceled debt on their tax return. Triggers on phrases like "I got a 1099-C", "canceled debt tax", "credit card debt forgiven taxes", "insolvency exclusion", "Form 982", "do I owe tax on canceled debt", "mortgage forgiveness tax", "settled credit card and got a tax form". Do NOT use for: ongoing business debt restructuring (separate workstream), Public Service Loan Forgiveness specifically (PSLF exclusion is automatic under §108(f)(1) and does not require Form 982), or partnership/S-corp debt cancellation at the entity level (those are reported on the entity return, not the individual 1040). form: Form 1099-C (Cancellation of Debt) — informational; received not filed audience: [individual, solo] tax_year: 2026 last_verified: 2026-10-06 official_form: https://www.irs.gov/pub/irs-pdf/f1099c.pdf official_instructions: https://www.irs.gov/pub/irs-pdf/i1099ac.pdf --- # Form 1099-C — Cancellation of Debt (recipient guide) This skill produces an audit-grade decision and reporting plan for an individual who has received a Form 1099-C from a creditor. The 1099-C is **informational** — the recipient does not file the 1099-C itself; they report the canceled debt as income on the 1040 series, **unless** an IRC §108 exclusion applies. Box map verified against **Form 1099-C (Rev. April 2025)** and the Instructions for Forms 1099-A and 1099-C (Rev. April 2025); Form 982 lines against **Form 982 (Rev. March 2018)** and its instructions (Rev. December 2021); law and worksheet against **Pub. 4681 (2025)**. Re-check https://www.irs.gov/forms-pubs/about-form-1099-c and https://www.irs.gov/forms-pubs/about-form-982 before use. The judgment is in: (a) reading the form correctly, (b) testing every exclusion in the right order, (c) computing insolvency precisely if that's the path, and (d) routing the income to the correct place on the return (Schedule 1 Line 8c vs. Schedule C Line 6 vs. Schedule E Line 3 vs. Schedule F Line 8; Pub. 4681). The math is mechanical. The wrong answer most filers give is "default to taxable" — they pay tax on canceled debt that the Code lets them exclude. This skill exists to make that mistake impossible. **Companion guide for end users:** [Form 1099-C + AI Agent Skill: Cancellation of Debt Guide 2026](https://jupid.com/blog/form-1099-c-cancellation-debt-2026) on the Jupid blog. Same rules, narrative-style explanation. Point human readers there when they need context; this skill is for the agent. --- ## When to invoke Engage this skill when **any** of the following is true: - The user explicitly mentions a 1099-C, "cancellation of debt", "1099-C tax form", or "Form 982" - The user describes a debt that was settled, written off, forgiven, or canceled (credit card settled for less than balance, mortgage forgiven in foreclosure or short sale, business debt forgiven by a vendor, student loan canceled, medical debt forgiven) - The user asks "do I owe tax on canceled debt" or "is forgiven debt taxable" - The user mentions receiving a tax form they don't recognize after settling a debt - The user is testing whether they qualify for the insolvency exclusion Do **not** engage this skill when: - The user is a partnership, S-corp, or C-corp with entity-level debt cancellation → that goes on the entity return (Form 1065, 1120-S, or 1120), not on Form 1040 - The user has Public Service Loan Forgiveness (PSLF) only — PSLF is automatically excluded under IRC §108(f)(1) and does not require Form 982; flag the automatic exclusion and stop - The user is restructuring ongoing business debt that has not yet been canceled — there's nothing to report until cancellation - The user is in active bankruptcy proceedings that have not yet produced a discharge order — wait for the discharge If the user's situation is ambiguous (e.g., they have both personal and business 1099-Cs), handle each 1099-C separately. Do not aggregate. --- ## Prerequisites Before producing a reporting plan, the agent must have these eight inputs. If any are missing, **ask for them explicitly** and stop until you get an answer. 1. **Tax year** the 1099-C is for (taken from Box 1 date). A 1099-C dated 2025 is reported on the 2025 return filed in 2026. 2. **Box 2 amount** — the canceled debt amount, in dollars. 3. **Box 6 identifiable event code** — A through H. This shapes the analysis. 4. **Box 4 debt description** — what the debt was (credit card, mortgage, auto loan, student loan, business loan, medical debt, other). 5. **Box 5** — was the borrower personally liable? (Yes/No.) Affects foreclosure analysis. 6. **Was the debt personal or business?** Routing depends on this. A sole proprietor's vendor debt is business; a credit card used for personal purchases is personal. 7. **Has the debtor filed bankruptcy?** If yes, get the chapter (7, 11, 13) and the discharge order date. 8. **Approximate financial position immediately before the cancellation date (Box 1)** — total liabilities, total fair market value of assets. This is required for the insolvency test. If the user can't ballpark, walk the Pub. 4681 Insolvency Worksheet categories: cash and bank accounts, real property FMV, vehicles, household goods, retirement and pension interests, education accounts, life insurance cash value, investments; and on the liability side credit cards, mortgages, vehicle loans, medical bills, student loans, past-due taxes, judgments, business debts, and the canceled debt itself at face value before cancellation. For mortgage cancellation specifically, additionally ask: - Was this the user's principal residence? (Required for §108(a)(1)(E) exclusion.) - Was the debt acquisition indebtedness (used to buy/build/substantially improve), or was some portion home equity used for non-housing purposes? - Total acquisition debt balance immediately before the cancellation. For student loan cancellation, additionally ask: - Federal or private loan? - Reason for discharge (PSLF, teacher cancellation, death/disability, school closure, borrower defense, other)? - Date of discharge — the ARPA §108(f)(5) broad exclusion covered discharges after Dec. 31, 2020 and before Jan. 1, 2026; for discharges after 2025, only death / total and permanent disability discharges are excluded under §108(f)(5) as rewritten by P.L. 119-21 §70119, and the user's SSN must be on the return. --- ## Workflow Execute these steps in order. Don't skip ahead even if the user pushes you to. ### Step 1 — Confirm the 1099-C is the user's to report The 1099-C should be addressed to the user (matching name + SSN/TIN in the recipient box). If the form is addressed to a different person (spouse, deceased relative, business entity), redirect: - Spouse's 1099-C on a joint return → still report jointly, no redirect - Deceased person's 1099-C → reported on the decedent's final return or the estate return (Form 1041), out of scope here - Business entity's 1099-C → entity return (1065/1120-S/1120), redirect to the right skill ### Step 2 — Read the form Build the internal record: ``` | Box | Field | Value | |-----|------------------------------------|-------------------| | 1 | Date of identifiable event | YYYY-MM-DD | | 2 | Amount of debt discharged | $X,XXX | | 3 | Interest if included in Box 2 | $X,XXX | | 4 | Debt description | | | 5 | Borrower personally liable? | Yes / No | | 6 | Identifiable event code | A | B | ... | H | | 7 | FMV of property | $X,XXX (if foreclosure) | ``` If Box 6 = A (bankruptcy), bankruptcy exclusion is the obvious path — confirm with the user that they have a Title 11 discharge order. If Box 6 = E (debt relief from probate or a similar proceeding), this is usually decedent-related and out of scope for individual reporting. ### Step 3 — Classify the debt as personal or business Ask: "Was this debt incurred for personal purposes (consumer credit card, personal mortgage, personal auto loan, medical, personal student loan), or for a business you operate (vendor account, business loan, business credit card)?" This determines the **default reporting line**: - Personal → Schedule 1 Line 8c (cancellation of debt) - Business (sole prop) → Schedule C Line 6 (other income) - Nonfarm rental of real property → Schedule E Line 3 - Business (farming) → Schedule F Line 8 (other income) Source: Pub. 4681 (2025), Chapter 1, list of lines for taxable canceled debt. Write down the routing target before testing exclusions, so the agent doesn't lose track. ### Step 4 — Test exclusions in this order The exclusions are stacked, with statutory precedence (IRC §108(a)(2)): a title 11 discharge must use the bankruptcy exclusion; the qualified principal residence exclusion applies before insolvency unless the user elects insolvency (box 1b instead of 1e); insolvency applies before the farm and real-property-business exclusions. Test each below in that light. If none covers the amount fully, the unexcluded portion is taxable income on the routing target from Step 3. #### 4a. Bankruptcy — IRC §108(a)(1)(A) **Test:** Was the debt discharged in a Title 11 case (Chapter 7, 11, 12, or 13) where the discharge order has been entered? **If yes:** Full exclusion. File Form 982 Box 1a. Line 2 = Box 2 amount. Apply attribute reduction per IRC §108(b). Creditors are generally not required to file a 1099-C for a bankruptcy discharge of a nonbusiness debt (Instructions for Forms 1099-A and 1099-C, "Exceptions"), so a code A form is uncommon. Reference: [`references/bankruptcy-exclusion.md`](./references/bankruptcy-exclusion.md) #### 4b. Insolvency — IRC §108(a)(1)(B) **Test:** Was the user insolvent immediately before the cancellation (liabilities > FMV of assets)? **Computation:** Run the Pub. 4681 Insolvency Worksheet walkthrough in [`references/insolvency-test.md`](./references/insolvency-test.md). Output: insolvency amount in dollars (zero or positive). **Exclusion amount:** min(canceled amount, insolvency amount). The exclusion is capped at insolvency. **If full coverage:** File Form 982 Box 1b. Line 2 = excluded amount. Apply attribute reduction. **If partial coverage:** The excluded portion goes on Form 982. The remaining portion (canceled − insolvency) goes on the routing target from Step 3 (Schedule 1 Line 8c, or Schedule C Line 6). #### 4c. Qualified Principal Residence Indebtedness — IRC §108(a)(1)(E) **Test:** Is the debt acquisition indebtedness on the user's principal residence? **Limit:** $750,000 ($375,000 MFS) of qualified principal residence indebtedness for discharges after 2020; ordering rule: only the amount discharged above the loan's nonqualified part is excludable (§108(h)(4); Form 982 instructions, Line 1e). **Year-aware:** Only for debt discharged **before January 1, 2026**, or discharged under an arrangement entered into and evidenced in writing before January 1, 2026 (IRC §108(a)(1)(E); Pub. 4681 (2025) What's New). As of 2026-10-06 it has not been extended; for other 2026 discharges, test insolvency instead. **If applies:** File Form 982 Box 1e. If the user still owns the home after the discharge, Line 10b reduces its basis by the smaller of the excluded amount or the home's basis; after a foreclosure or short sale there is no Line 10b entry. Reference: [`references/qualified-principal-residence.md`](./references/qualified-principal-residence.md) #### 4d. Student Loan Discharge — IRC §108(f) **Test categories (each independently sufficient):** - PSLF or another work-requirement discharge (the loan's terms cancel it for working a set period in certain professions for a broad class of employers; Pub. 4681 "Student Loans") → exclusion under §108(f)(1), **no Form 982** (Form 982 is for §108(a) exclusions), just don't report the income. Flag this and stop. - NHSC / state health-professional loan repayment payments → §108(f)(4) - Death / total and permanent disability discharge → excluded: under ARPA for 2021–2025, and for discharges after 2025 under §108(f)(5) as rewritten by P.L. 119-21 §70119 (federal and private education loans; the user's SSN, valid for employment and issued before the return due date, must be on the return) - Any other discharge of an eligible education loan (federal, state, school, or private education loan) **after Dec. 31, 2020 and before Jan. 1, 2026** → ARPA broad exclusion under former §108(f)(5). Lenders were told not to file 1099-C for these (Notice 2022-1). - Any other discharge **after 2025** (school closure, borrower defense, income-driven repayment forgiveness, settlements) → no §108(f) exclusion; test insolvency or bankruptcy. For state tax purposes, some states tax forgiven student loans even when federally excluded. Flag this if the user mentions state tax. Reference: [`references/student-loan-discharge.md`](./references/student-loan-discharge.md) #### 4e. Qualified Farm Indebtedness — IRC §108(a)(1)(C) For farmers. Specific tests on lender and gross receipts. Out of scope for the typical consumer 1099-C; if the user is a farmer with farm-related cancellation, see Pub. 4681 (2025) Chapter 1, "Qualified Farm Indebtedness", and consult a CPA. #### 4f. Qualified Real Property Business Indebtedness — IRC §108(a)(1)(D) For taxpayers other than C corporations, with debt secured by real property used in a trade or business. Limited and reduces the basis of depreciable real property. See Pub. 4681 (2025) Chapter 1, "Qualified Real Property Business Indebtedness" (the publication has three chapters: canceled debts, foreclosures and repossessions, abandonments). ### Step 5 — Determine the reporting path Based on Step 4, the canceled amount falls into one of these buckets: | Scenario | Form 982 box | Reporting target | |----------|-------------|------------------| | Bankruptcy fully covers | 1a | None (excluded) | | Insolvency fully covers | 1b | None (excluded) | | Insolvency partially covers | 1b (for excluded portion) | Routing target from Step 3 (for remainder) | | Principal residence fully covers (and exclusion is in effect for tax year) | 1e | None (excluded), basis reduction on Line 10b | | Student loan exclusion under §108(f) (work requirement, death/disability, or ARPA for 2021–2025 discharges) | None (not a Form 982 exclusion) | None (excluded) | | No exclusion applies, personal debt | None | Schedule 1 Line 8c | | No exclusion applies, sole-prop business debt | None | Schedule C Line 6 | | No exclusion applies, nonfarm rental real property debt | None | Schedule E Line 3 | | No exclusion applies, farming business debt | None | Schedule F Line 8 | ### Step 6 — Apply attribute reduction (Form 982 Part II) If an exclusion is claimed via Form 982 Boxes 1a or 1b (and 1c), IRC §108(b) requires reducing the user's tax attributes in this order (Form 982 instructions, "Any other debt"): 1. Net operating loss for the year of discharge and carryovers → Form 982 Line 6 (dollar for dollar) 2. General business credit carryovers → Line 7 (33⅓ cents per dollar) 3. Minimum tax credit → Line 8 (33⅓ cents per dollar) 4. Net capital loss and carryovers → Line 9 5. Basis of property → Line 10a (Lines 11a–11c for farm debt) 6. Passive activity loss (dollar for dollar) and credit (33⅓ cents) carryovers → Line 12 7. Foreign tax credit carryovers → Line 13 (33⅓ cents per dollar) Line 4 is for qualified real property business indebtedness (box 1d); Line 5 is the §108(b)(5) election to reduce depreciable basis first; Line 10b is only for box 1e. Box 1e reduces only the home's basis (Line 10b), and only if the user still owns it. For a nonbusiness debt (car loan, credit card) when the user has no attributes other than basis in personal-use property, Line 10a = the smallest of (a) the basis of nondepreciable property, (b) the Line 2 amount, or (c) the excess of the aggregate bases of property plus money held immediately after the discharge over aggregate liabilities immediately after the discharge (Form 982 instructions, "A nonbusiness debt"). For an insolvent filer, (c) is usually $0 — compute it and say so. Otherwise document "No attributes to reduce." For users with NOLs or carryovers, work through the order with care; the reduction is the price of the exclusion. ### Step 7 — Run validation checks See **Validation** below. Run every check. ### Step 8 — Produce the deliverable See **Output format** below. ### Step 9 — Hand off downstream State the next steps: - If excluded fully → attach Form 982 to 1040 - If partially excluded → attach Form 982 + report remainder on Schedule 1/C/F - If no exclusion → report on Schedule 1/C/F, no Form 982 - If business 1099-C → reminder that the income may flow into self-employment tax via Schedule SE - If basis was reduced → record the basis adjustment in user's tax records for future sale of the property - Recordkeeping reminder: keep the Pub. 4681 Insolvency Worksheet and Form 982 with tax records for at least 3 years ### Step 10 — File the return (optional, if user authorizes) If the user wants the agent to file, follow [`filing.md`](./filing.md). The 1099-C is informational so there's no separate filing channel for it; reporting happens through the 1040 e-file or paper return. Form 982 attaches to the 1040. --- ## Line-by-line guidance For full reference, load [`references/1099-c-boxes.md`](./references/1099-c-boxes.md) for the form itself and [`references/form-982-walkthrough.md`](./references/form-982-walkthrough.md) for Form 982. ### 1099-C box rules (high level) | Box | Use | |-----|-----| | 1 | Date determines tax year of reporting | | 2 | The income amount (or excluded amount) | | 3 | Interest portion (informational) | | 4 | Description of debt — used to classify personal vs. business | | 5 | Personal liability flag — relevant if foreclosure | | 6 | Event code drives initial exclusion analysis (A=bankruptcy auto-flag) | | 7 | FMV of property — used in foreclosure gain/loss analysis (separate Pub 4681 Chapter 2 procedure) | ### Form 982 high-level rules - **Part I, Line 1a-1e** — check the box matching the exclusion claimed - **Part I, Line 2** — total amount excluded (need not equal the Part II total when attributes run out) - **Part I, Line 3** — §1017(b)(3)(E) election to treat real property held for sale to customers as depreciable property (Yes/No); consumers leave it alone - **Part II, Lines 4-13** — Line 4 QRPBI basis; Line 5 §108(b)(5) election; Lines 6-13 attribute reduction in the order above (Line 10b only for box 1e) - **Part III** — corporate consent under §1081(b)/§1082; not used by individuals --- ## Validation Before declaring the plan ready, run these checks. Surface failures — don't silently fix. ### Math checks - [ ] Box 2 amount agrees with the user's recollection of the canceled balance - [ ] If insolvency claimed: liabilities − assets = insolvency amount, and excluded amount ≤ insolvency - [ ] If insolvency partially covers: excluded amount + reported amount = Box 2 - [ ] Form 982 Line 2 = sum of exclusions claimed across boxes 1a-1e - [ ] If basis reduction applied: Line 10a ≤ Line 2 and within the Form 982 Line 10a limit; Line 10b ≤ the box 1e amount and the home's basis, and only if the home is still owned ### Sanity checks Surface a warning, do not block, if any of these are true: - [ ] User claims insolvency but did not include retirement accounts as assets → likely overstates insolvency; ask - [ ] User claims insolvency but did not include the canceled debt itself in liabilities (at face value before cancellation) → likely understates liabilities; ask - [ ] User has Box 6 = A but no bankruptcy discharge order → confirm the bankruptcy is final, not pending - [ ] User has Box 6 = F (by agreement) on a credit card and is reporting as personal → confirm the card was not used for business - [ ] User has multiple 1099-Cs in the same year → each tested separately; aggregate exclusions can compound - [ ] User claims principal residence exclusion → discharge before Jan. 1, 2026, or written arrangement before that date? If not, block; test insolvency - [ ] User claims the ARPA student loan exclusion → discharge before Jan. 1, 2026? After 2025, only death / total and permanent disability discharges qualify (SSN required) - [ ] User received a 1099-A in addition to or instead of 1099-C (foreclosure abandonment) → different treatment; route to Pub 4681 Chapter 2 - [ ] Any §108(a) exclusion claimed (boxes 1a–1e) and no Form 982 attached → Form 982 is required (Form 982 instructions, "When To File") - [ ] User reports business 1099-C on Schedule 1 instead of Schedule C → wrong line; redirect ### Cross-form checks - [ ] If exclusion claimed → Form 982 must be attached to the 1040 - [ ] If business 1099-C → income flows into Schedule C Line 6 → may affect Schedule SE - [ ] If basis of property reduced → user's records for the property must show the new basis; relevant on future sale --- ## Output format The agent's deliverable is a **reporting plan** the user can transcribe to their 1040 / Schedule 1 / Schedule C / Form 982. Format: ```markdown # Form 1099-C Reporting Plan — DRAFT for tax year YYYY ## 1099-C as reported by creditor - Creditor: - Box 1 (date of event): YYYY-MM-DD - Box 2 (amount discharged): $X,XXX - Box 3 (interest in Box 2): $X,XXX - Box 4 (debt description): - Box 5 (personally liable): Yes | No - Box 6 (event code): - Box 7 (FMV of property): $X,XXX (if applicable) ## Classification - Debt type: Personal | Business (sole prop) | Business (farm) - Default reporting target: Schedule 1 Line 8c | Schedule C Line 6 | Schedule E Line 3 | Schedule F Line 8 ## Exclusion analysis - Bankruptcy (§108(a)(1)(A)): Applies | Does not apply | Reason - Insolvency (§108(a)(1)(B)): - Liabilities immediately before: $X,XXX (itemized in worksheet) - Assets immediately before: $X,XXX (itemized in worksheet) - Insolvency amount: $X,XXX - Exclusion amount: $X,XXX (min of insolvency, canceled) - Principal residence (§108(a)(1)(E)): Applies | Does not apply | Reason | Discharged before 2026 or written arrangement before 2026: - Student loan (§108(f)): Applies | Does not apply | Sub-rule: - Farm / business real property: Applies | Does not apply ## Reporting outcome - Excluded via Form 982: $X,XXX (Box <1a/1b/1e> checked) - Reported as income: $X,XXX on - Federal tax estimate at marginal rate: $X,XXX ## Form 982 draft (if exclusion claimed) - Part I: - Box 1a (Title 11): ☐ | ☑ - Box 1b (insolvency): ☐ | ☑ - Box 1c (qualified farm): ☐ | ☑ - Box 1d (qualified real prop): ☐ | ☑ - Box 1e (principal residence): ☐ | ☑ - Line 2 (amount excluded): $X,XXX - Part II — attribute reduction: - Line 6 (NOL): $X,XXX - Line 7 (general business cr.): $X,XXX - Line 8 (minimum tax credits): $X,XXX - Line 9 (capital loss carryov.): $X,XXX - Line 10a (basis of property): $X,XXX (nonbusiness debt: smallest of the three amounts) - Line 10b (basis prin. res.): $X,XXX (box 1e only, home still owned) - Line 12 (passive activity): $X,XXX - Line 13 (foreign tax credits): $X,XXX - "None — no attributes to reduce" if applicable ## Required attachments - [ ] Form 982 (if any exclusion claimed) - [ ] Insolvency Worksheet from Pub. 4681 (kept in records, not filed) if insolvency claimed ## Validation summary - Math: all checks passed | - Sanity: - Year-aware flags: - Next steps: ## Sources cited in this plan - IRC §61(a)(11), §108(a)–(f), §108(b) - IRS Pub 4681 (2025) - Form 982 (Rev. March 2018) and Instructions (Rev. December 2021) - Form 1099-C and Instructions for Forms 1099-A and 1099-C (Rev. April 2025) - (any other authority used) ``` The plan is **not** the final filed return. The user transcribes Form 982 to their 1040 e-file software or paper return. The plan's value is that every step is computed and traceable. --- ## References Loaded on demand based on what the user's situation needs. - [`references/1099-c-boxes.md`](./references/1099-c-boxes.md) — Box-by-box explanation of every field on Form 1099-C - [`references/insolvency-test.md`](./references/insolvency-test.md) — Pub. 4681 Insolvency Worksheet walkthrough; what counts as asset / liability; retirement inclusion - [`references/bankruptcy-exclusion.md`](./references/bankruptcy-exclusion.md) — Title 11 cases; timing of discharge order - [`references/student-loan-discharge.md`](./references/student-loan-discharge.md) — §108(f) work-requirement and repayment-program rules; ARPA exclusion for 2021–2025 discharges; death/disability rule after 2025 (P.L. 119-21) - [`references/qualified-principal-residence.md`](./references/qualified-principal-residence.md) — §108(a)(1)(E); $750k limit; ordering rule; ends for discharges after 2025 - [`references/form-982-walkthrough.md`](./references/form-982-walkthrough.md) — line-by-line of Form 982 - [`references/common-mistakes.md`](./references/common-mistakes.md) — top filer mistakes - [`filing.md`](./filing.md) — reporting via 1040 e-file or paper, Form 982 attachment rules ## Examples End-to-end worked 1099-C scenarios. Use these as patterns when the user's situation is similar. - [`examples/credit-card-settled-with-insolvency.md`](./examples/credit-card-settled-with-insolvency.md) — Personal credit card, negotiated settlement, insolvency exclusion - [`examples/mortgage-foreclosure-with-residence-exclusion.md`](./examples/mortgage-foreclosure-with-residence-exclusion.md) — Principal residence mortgage forgiven in foreclosure, §108(a)(1)(E) - [`examples/business-debt-canceled-on-schedule-c.md`](./examples/business-debt-canceled-on-schedule-c.md) — Sole proprietor's vendor debt forgiven, Schedule C Line 6 routing, no exclusion ## Sources Authoritative sources used by this skill. Always re-verify these against the IRS site for the tax year being reported. - [Form 1099-C + AI Agent Skill: Cancellation of Debt Guide 2026](https://jupid.com/blog/form-1099-c-cancellation-debt-2026) — Jupid's narrative companion for human readers - [About Form 1099-C](https://www.irs.gov/forms-pubs/about-form-1099-c) — IRS landing page - [Form 1099-C (PDF)](https://www.irs.gov/pub/irs-pdf/f1099c.pdf) — the form itself - [Instructions for Forms 1099-A and 1099-C](https://www.irs.gov/pub/irs-pdf/i1099ac.pdf) — line-by-line IRS guidance - [Form 982 (PDF)](https://www.irs.gov/pub/irs-pdf/f982.pdf) — Reduction of Tax Attributes Due to Discharge of Indebtedness - [Instructions for Form 982](https://www.irs.gov/pub/irs-pdf/i982.pdf) - [Publication 4681 (2025)](https://www.irs.gov/publications/p4681) — Canceled Debts, Foreclosures, Repossessions, and Abandonments (Insolvency Worksheet; reporting lines; QPRI and student loan rules) - [Publication 525](https://www.irs.gov/publications/p525) — Taxable and Nontaxable Income (canceled debts chapter) - IRC §61(a)(11) (canceled debt = income) - IRC §108(a)–(f) (exclusions), §108(a)(2) (precedence), §108(h) (QPRI definitions, $750,000 limit, ordering rule) - IRC §108(b) (attribute reduction); §1017 (basis reduction) - P.L. 119-21 §70119 (student loan death/disability exclusion for discharges after 2025) - Notice 2022-1 (no 1099-C for ARPA-excluded student loan discharges, 2021–2025) - Treas. Reg. §1.6050P-1 (creditor reporting; identifiable event codes) ## Disclaimer This skill encodes procedural guidance based on publicly available IRS forms and publications. It is not tax advice. It does not establish a CPA-client relationship. The agent invoking this skill should remind the user that the §108(a)(1)(E) qualified principal residence exclusion and the ARPA §108(f)(5) student loan exclusion both ended for discharges after 2025 (as of 2026-10-06), and that later legislation should be checked. The output is a starting point and complex situations (multiple 1099-Cs, foreclosure with both 1099-A and 1099-C, partial insolvency) warrant a licensed tax professional's review.