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You must attach a description of any transactions resulting in the reduction in basis under section 1017. See Regulations section 1.1017-1 for basis reduction ordering rules, and, if applicable, required partnership consent statements. (For additional information, see the instructions for Part II.)
Information about Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), including recent updates, related forms, and instructions on how to file. Form 982 is used to find the discharged indebtedness amount that can be excluded from gross income.
File Form 982 with your federal income tax return for a year a discharge of indebtedness is excluded from your income under section 108 (a).
In order to claim this, taxpayers must file IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). In this article, we’ll walk through the different types of forgiven debt you may exclude on your income tax return, and how to report it on Form 982.
Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness) reports the amount of cancelled debt to excluded from taxable income. We'll automatically generate Form 982 if your cancelled debt is due to: Cancellation of qualified principal residence indebtedness, aka mortgage debt relief;
Once Form 982 is complete you will want to review Form 1040 "Other Income" line. This is the amount of your canceled debt that's taxable. If you were insolvent, it should be zero or at least less than the total canceled debt from the 1099-C
You should have received a 1099-C from your mortgage company. After you enter the info from it, we'll determine if the forgiven debt qualifies for the exclusion. If it does, we'll also fill out Form 982 as part of your return. Entering other types of excludable canceled debt.
Understanding how to properly use IRS Form 982 alongside Form 1099-C is crucial to potentially reducing or eliminating your tax liability from debt cancellation. This guide aims to help demystify these forms to help you navigate the process.
IRS Form 982 enables you to exclude the forgiven debt amount from your taxable income, but only if you qualify for an exemption. In this article, we’ll go through the ins and outs of Form 982 IRS to show you how and under which circumstances it can help reduce your tax liability. Debt Discharge And Form 1099 C. Let’s start with the basics.
You can obtain IRS Form 982, also known as the Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), on the IRS website or on this page. The form is available for download as a PDF file, which you can print and complete manually or fill out electronically using tax software or online tax tools.