Question

Received 1099C for Cancellation of Debt

Forum|Forum|2 years ago
March 3, 2024
1 reply
0 views

I have a farm that operates as an LLC partnership. I use TurboTax Business for the form 1065. I indicated that I received Cancellation of Debt not related to PPP then continued through the walk through. I was never asked about the cancellation so it doesn't appear anywhere on the Schedule K-1. It should populate line 11 with a code E for each partner's portion of the cancellation. I have tried to enter the amount in Other Income sections but it doesn't appear on Line 11.

How do I get this into the form?

TurboTax Business Windows

PatriciaV

Yes, you are correct. When a partnership receives Form 1099-C reporting canceled debt, this becomes income passed through to the partners on Schedule K-1.

To enter cancelation of debt income in the partnership return, go to Forms:

Open Form 1065 p5-6
Go to Line 11 G
Enter amount from 1099-C and code E will appear in the small box.
This will be allocated according to ownership percentage and appear on Schedule K-1 Part III Line 11 Code E.

Entering 1099-C under Other Income includes the amount in net income but loses the debt cancellation character.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"