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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4299
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I had a bankruptcy and foreclosure in 2011, did my taxes on

Customer Question

I had a bankruptcy and foreclosure in 2011, did my taxes on line w/H&R and they say i don't need form 982??? IRS rep is a lot of double talk, no help. How to i calculate data form form 982 line 10a? 1099C canceled debt $44,307.00, FMV $48,000.00. Bankruptcy filing: Assets $32,841.00, Liab $75,456.00 {which does not include balance of mtg $70K because the foreclosure occurred first, So what figure is used on line 10a form 982.

dan
Submitted: 5 years ago.
Category: Tax
Expert:  PDtax replied 5 years ago.

PDtax :

hi from just answer.

PDtax :

the thing most preparers know is that none of the discharged dent will be includable in income for 2011 for you. That's probably why rep said don't worry about it, and IRS personnel are not a reliable source for answers. (I know, but how how could they get reliable tax customer service people to work from February to April?)

PDtax :

982 is designed to use up/allocate losses to tax attributes. If, for example, you had a net operating loss carryforward of 150,000 into 2011, and you discharged 110,000 of debt, the form would be used to use 110,000 of the loss, leaving 40,000 of the nol.

PDtax :

i thought some background about the use of the form made sense before we discuss what to use it for, or if it is needed.

JACUSTOMER-caxweaql- :

ok,what do you need?

PDtax :

debt appears to be qualified principal residence indebtedness. I would check the title 11 box on line 1a,

PDtax :

put the total debt discharge on line 2,

PDtax :

because you did not retain the home, basis reduction in part 2 is not an issue.

JACUSTOMER-caxweaql- :

so that's all i need to do?

PDtax :

yes. 982 discloses the discharge, and law was expanded to allow 2 million on a joint return. I think that's all you need.

PDtax :

If this answers your question, click Accept. Thanks from Just Answer.