Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Cancellation of Debt (COD)

Introduction

Objectives

At the end of this course, using the resource materials, you will be able to:

  • Define cancellation of debt
  • Identify the difference between recourse and nonrecourse debt
  • Identify the exceptions and exclusions to the general rule for including canceled debt as income
  • Determine the requirements for the cancellation of debt on principal residence and nonbusiness credit card debt when preparing tax returns
  • Determine the filing requirements for recipients of foreclosures – Form 1099-A, Acquisition or Abandonment of Secured Property
  • Determine the filing requirements for recipients of Form 1099-C, Cancellation of Debt
  • Determine if a taxpayer may exclude from taxable income certain debt forgiven or canceled on their principal residence
  • Determine when canceled credit card debt is included in gross income on Form 1040

Estimated time to complete: 2 hours

Tip

Reviewing the hyperlinks contained in this course will enhance your understanding of the material.