1095-C statement for Schedule 1

[dhale92]

I have a client who received 2 forms 1095-C for cancellation of debt.  The client is insolvent much more than the amount of discharged debt.  I have filed out the debt under Misc Income for each form, then prepare 2 extra line items as negatives to zero out and have prepared form 982.  Proconnect is not generating a statement for Schedule 1 line 8c or line z under part one to show the IRS we are claiming the debt as income but backing it off as exempt under the insolvency exclusion like it says it should when I research 1095-C on the Proconnect website.  I have not hard printed the return to double check, just downloaded the PDF and nothing is showing up.

[George4Tacks]

Go to Miscellaneous Forms > Discharge of Indebtedness (982) > Check the 2nd box > Enter the amount you are trying to reverse in the box.

[dhale92]

Thanks George...  I'm used to seeing a statement for Sch 1 showing the 1095-C amounts and then a separate line "exclusion due to insolvency" to try to avoid the IRS giving a matching notice since the 1095-C amounts are not showing up on line 8 of the Sch 1.  But if I don't input the following below with the negatives it automatically takes the amounts to the 1040 and taxes them...

Cancellation of Debt (1099_C)

Chase Bank      1,882

BofA                  2,700

Exclusion         -4,582

[BobKamman]

What you are used to and what is correct are two different things.  Just fill out Part 1 of the 982 with the total of the two 1095-C forms in Box 2 and the box for Line 1(b) checked.  

IRS may send a notice if the 982 is not filed with the return.  They're likely to start a full audit when you add something in and then subtract it out, contrary to instructions.