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For Paperwork Reduction Act Notice see separate instructions. Cat. No. 17066E Form 982 Rev. 3-2018. Form Rev* March 2018 Department of the Treasury Internal Revenue Service Reduction of Tax Attributes Due to Discharge of Indebtedness and Section 1082 Basis Adjustment Attach this form to your income tax return* Go to www*irs*gov/Form982 for instructions and the latest information* a b c d e Attachment Sequence No* 94 Identifying number Name shown on return Part I OMB No* 1545-0046 General...
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Comments and Help with form 982 for 2017

Who Needs Form 982?

Under certain circumstances described in section 108 of the Internal Revenue Code, a taxpayer is allowed to exclude the amount of discharged indebtedness from their gross income. Such a taxpayer must file Form 982.

What is the Purpose of Form 982?

The purpose of Form 982 is to report the exclusion and the reduction of certain tax attributes either dollar for dollar or thirty-three and a third cents per dollar.

Which Documents does Form 982 Support?

A taxpayer should attach the form to his income tax return.

When is Form 982 Due?

A taxpayer should file Form 982 with their federal income tax return for a year a discharge of indebtedness is excluded from their income under section 108(a) of the Internal Revenue Code. The taxpayer must elect on a timely filed return to reduce the basis of depreciable property under section 108(b)(5) and the election made on line 1d of Part I regarding the discharge of qualified real property business indebtedness.

If the taxpayer filed their tax return without making either of the above-mentioned elections, they can still make either election by filing an amended return within six months of the due date of the return. The taxpayer must write “Filed pursuant to section 301.9100-2” on the amended return and file it at the same place the original return was filed.

How do I Fill out Form 982?

If the discharged debt is:

  1. Qualified principal residence indebtedness:
    1.1. Check the box on line 1e.
    1.2. Include on line 2 the amount of discharged qualified principal residence indebtedness that is excluded from gross income. Any amount in excess of the excluded amount may result in taxable income. If you disposed of your residence, you may also be required to recognize a gain on its disposition.
    1.3. If you continue to own your residence after the discharge, enter on line 10b the smaller of (a) the amount of qualified principal residence indebtedness included on line 2 or (b) the basis (generally, your cost plus improvements) of your principal residence.
  2. A nonbusiness debt (other than qualified principal residence indebtedness, such as a car loan or credit card debt):
    2.1. Check the box on line 1a if the discharge was made in a title 11 case (see Definitions, later) or the box on line 1b if the discharge occurred when you were insolvent (see Line 1b, later).
    2.2. Include on line 2 the amount of discharged nonbusiness debt that is excluded from gross income. If you were insolvent, don’t include more than the excess of your liabilities over the fair market value of your assets.
    2.3. Include on line 10a the smallest of (a) the basis of your nondepreciable property, (b) the amount of the nonbusiness debt included on line 2, or (c) the excess of the aggregate bases of the property and the amount of money you held immediately after the discharge over your aggregate liabilities immediately after the discharge.
  3. Any other debt:
    Use Part I of Form 982 to indicate why any amount received from the discharge of indebtedness should be excluded from gross income and the amount excluded.
    Use Part II to report your reduction of tax attributes. The reduction must be made in the following order unless you check the box on line 1d for qualified real property business indebtedness or make the election on line 5 to reduce basis of depreciable property first.
    3.1. Any net operating loss (NOL) for the tax year of the discharge (and any NOL carryover to that year) (dollar for dollar);
    3.2. Any general business credit carryover to or from the tax year of the discharge (33 1/3 cents per dollar);
    3.3. Any minimum tax credit as of the beginning of the tax year immediately after the tax year of the discharge (33 1/3 cents per dollar);
    3.4. Any net capital loss for the tax year of the discharge (and any capital loss carryover to that tax year) (dollar for dollar);
    3.5. The basis of property (dollar for dollar);
    3.6. Any passive activity loss (dollar for dollar) and credit (33 1/3 cents per dollar) carryovers from the tax year of the discharge; and
    3.7. Any foreign tax credit carryover to or from the tax year of the discharge (33 1/3 cents per dollar).

Use Part III to exclude from gross income under section 1081(b) of the Internal Revenue Code any amounts of income attributable to the transfer of property described in that section.

Video instructions and help with filling out and completing irs form 982 2017
Instructions and Help about irs form 982 pdf

This message is brought to you by the Taxpayer Advocate service your voice at the IRS hello I'm Nina Olson the National Taxpayer Advocate we in the Taxpayer Advocate service are bringing you a series of consumer tax tips to help you understand some important tax issues you may be facing this series focuses on the issue of cancellation of debt if you have lost your home to foreclosure or had your credit card balances written off or your car repossessed you need to know about the tax consequences of cancellation of debt income if you've received a form 1099 C cancellation of debt in the mail please don't ignore it and hope the problem will go away the lender sends this form to you and the IRS reporting the amount of cancelled debt income you may not have to pay taxes on some or all of the cancelled debt but you have to tell the IRS why your cancelled debt income is not taxable or else the IRS will treat it as taxable income to ask the IRS to exclude this amount from your income you need to complete form 982 reduction of tax attributes due to discharge of indebtedness and attach it to your return the tax rules about cancellation of debt income are complicated so to learn more about what steps to take you need to either read up about it yourself or go to a qualified tax advisor if you want to learn the rules yourself look over IRS Publication 46 81 canceled debts foreclosures repossessions and abandonments which you can find on the IRS website at www.opm.gov/tribalprograms [Music] member if you don't complete an attach form 982 to your return the IRS will treat your cancellation of debt income as taxable and you will owe taxes on that amount again you must file Form 982 with your return to claim the exclusion getting an exclusion is not automatic you can get help by calling the IRS at one eight hundred eight to nine 1040 or by visiting one of the taxpayer assistance centers located throughout the nation the tax treatment of cancellation of debt income is very complex and you might also consider seeking professional help when faced with this issue Volunteer Income Tax Assistance or Vita sites can help with return preparation including form 982 if you had cancelled debt because you lost your home to foreclosure the IRS is taxpayer assistance centers can help with return preparation for most other exceptions for cancellation of debt income I hope this information helps but if you have a tax problem that is causing financial difficulty or significant cost or you have tried to resolve your issue through normal IRS channels and have gotten nowhere or you believe an IRS system or procedure just isn't working as it should you can come to the Taxpayer Advocate service we're independent within the IRS so our people know the system and can help you navigate it we will listen to your problem help you understand what needs to be done to resolve it and stay with you every step of the way until your problem is resolved we have at least one local Taxpayer Advocate...