What is form 982 reduction of tax attributes due to discharge of indebtedness
Quick Answer
The IRS 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.
CAUTION: Form 982 is a reporting form, not a calculating form
The IRS 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.
For more information on Form 982 please refer to the IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basic Adjustments)
Key situations where Form 982 might be used include:
Bankruptcy: Debts discharged in bankruptcy are generally excluded from taxable income.
Insolvency: If you are insolvent (i.e., your liabilities exceed your assets) at the time the debt is canceled, you might be able to exclude the canceled debt from your income.
Qualified Principal Residence Indebtedness: Under certain conditions, canceled debt on a principal residence might be excluded from income.
The form helps taxpayers properly report these situations and potentially reduce their tax liability.
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