Form 982 (Rev. December 2017). Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)-2025

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Form 982 is used to determine, under certain circumstances described in section 108, the amount of discharged indebtedness that can be excluded from gross income.
Under the provisions of section 108(a) of the Internal Revenue Code, the taxpayer hereby elects to exclude from gross income the above amount of income attributable to the discharge of indebtedness for the above taxable year and consents to have the basis of property adjusted in ance with the regulations
A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may be excluded as income under the insolvency exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent.
Note. The debt is qualified farm debt (see chapter 3 of Publication 225 Farmers Tax Guide) The debt is qualified real property business debt (see chapter 5 of Publication 334 Tax Guide for Small Business) You are insolvent or bankrupt (see Publication 908 Bankruptcy Tax Guide)
File IRS form 982 with your 1040 income tax form. The form is located at the IRS website here: . Simply list the dollar amount shown on the 1099c and indicate 1. (b) on the 982 form that you are insolvent.
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Tax attributes are adjustments made when a taxpayer becomes insolvent or declares bankruptcy. They refer to certain losses, tax credits, and the adjusted basis of property that must be reduced because debt cancellation is excluded from a taxpayers gross income.
To show that your debt was canceled in a bankruptcy case and is excluded from income, attach Form 982 to your federal income tax return and check the box on line 1a. Lines 1b through 1e dont apply to a cancellation that occurs in a title 11 bankruptcy case.

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