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Charles Markham
Charles Markham, EA, MST, USTCP
Category: Tax
Satisfied Customers: 769
Experience:  IRS Enrolled Agent, US Tax Court Practitioner
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FORM 982 PART III REQUESTS THE DESCRIPTION OF THE TRANSACTION

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FORM 982 PART III REQUESTS THE DESCRIPTION OF THE TRANSACTION IN THE NONRECOGNITION OF GAIN UNDER SECTION 1081. WHAT EXACTLY DOES THIS MEAN?

TaxWhisperer :

Are you filing a CORPORATE tax return, Form 1120 or 1120S?

TaxWhisperer :

Part III only applies if a corporate if attaching Form 982 to its corporate tax return.

Customer:

yes corp return

TaxWhisperer :

Oh, okay. Normally people are doing 982s for their personal taxes.

Customer:

yes but for this 1120s the lawyer wants it done right. help!!

TaxWhisperer :

The Part III really just reiterates the basis adjustment that should be taking place whenever you exclude COD from income.

TaxWhisperer :

You would enter in the first box, the number from line 2.

TaxWhisperer :

The tax year beginning would be Jan 1, 2011 to 12-31-2011, assuming a calendar year 2011 return.

TaxWhisperer :

The state incorporated in is self-evident.

Customer:

so they basically want us to describe the problems that caused the corporate entity to lose the moneys in the line of credit.

TaxWhisperer :

Wait a minute

TaxWhisperer :

Are we talking about a 2011 tax return?

Customer:

yes

TaxWhisperer :

Is this the form you are looking at?

Customer:

yes at the bottom of part III.

TaxWhisperer :

Oh, you are looking at the Note at the bottom. I see now.

Customer:

yes

TaxWhisperer :

This is really a very dry statement. You are not asking for permission or trying to explain anything.

TaxWhisperer :

Here's an example:

TaxWhisperer :

Corporation total cost basis in asset $400,000

TaxWhisperer :

Total Debt outstanding $300,000

TaxWhisperer :

Asset sold for $200,000

TaxWhisperer :

Cancellation of Debt allowed $100,000

Customer:

thanks Tax Whisperer but now I feel like a real rocket scientist, but learning something every day is important.

Customer:

also you look exactly like a copilot i had when i flew medivace choppers in Viet Nam.

Customer:

Respectfully

TaxWhisperer :

I hope we're good.

Customer:

Peter

TaxWhisperer :

Not trying to be a "wise guy" or anything. Sometimes texting comes across funny.

TaxWhisperer :

I hope your friend made it out alive from Viet Nam...

Customer:

Ya a couple of us did.

Customer:

god bless

Customer:

and have a good evening.

Customer:

Peter

TaxWhisperer :

You're welcome, Peter.

Charles Markham and other Tax Specialists are ready to help you