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Debt Forgiveness And Section 108

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Before starting this self study program, please go through the instructional document.

The topic is also scheduled as live webinar on the following dates

Oct 22, 2021 | 02:30 PM EDT Register


  • Discharge of Indebtedness
    2 mins
  • The "Mortgage Debt relief Act of 2007" Exclusion.
    13 mins
  • The "Insolvency" Exclusion.
    21 mins
  • Taxpayer Must Bifurcate the Transaction.
    23 mins
  • Reduction of Tax Attributes
    26 mins

Course Description

Debtors with cash flow issues who may be unable to pay their debts without accommodations from their lenders face numerous tax issues, and sometimes tax surprises, in the context of debt workouts and bankruptcy. The American economy is hurting and taxpayers are suffering. People are walking away from their homes and credit card debt. When creditors write off a debt, they are required by law to issue the taxpayer/debtor a Form 1099-C, Cancellation of Debt. It is unfortunate that many taxpayers and their representatives are unacquainted with IRC section 108 which excludes many of these discharges or cancellations of debt from taxable income. Receiving a form 1099-C can be a scary thing for taxpayers, who frequently then call their accountants for help. 

This Online CPE Webinar will discuss the various ways or reasons of cancellation of debt income which can be excluded from income and the consequences of such action including :

1. Issuance of 1099’s

  •  When 1099’s must be issued
  •  When forgiveness occurs

2. Exclusions from Gross Income

  •  Bankruptcy
  •  Insolvency
  •  Farm Indebtedness
  •  Real Property Indebtedness
  •  Principal Residence

3. School loans, gifts, Deductible Debt

4. Bifurcations

  •  Foreclosures and Short Sales
  •  COD vs capital gain or ordinary income

5. Form 982

6. Reduction of Tax Attributes

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Learning Objectives

  • To know how to determine if a taxpayer is insolvent under IRS definitions
  • how to prepare Form 982 and request audit reconsideration
  • To determine actions necessary to negate erroneous information reporting by creditors
  • To identify situations when cancellation of indebtedness income may be excluded under section 108
  • Differentiate situations that would likely result in COD income and eligible for exclusion

Who Should Attend?

  • California Registered Tax Professional
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Enrolled Agent
  • Entrepreneurial CPA
  • Maryland Tax Preparers
  • Oregon Tax Preparers
  • Tax Accountant (Industry)
  • Tax Attorney
  • Tax Director (Industry)
  • Tax Firm
  • Tax Managers
  • Tax Practitioners
  • Tax Preparer
  • Tax Professionals
  • Tax Pros
  • Young CPA