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 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

Estimated time to complete: 1.5 hours

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