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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I need to file a Form 982 for credit card debt and understand

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I need to file a Form 982 for credit card debt and understand that I need to check off Line 1b and then I'm lost after reading through the IRS Publication.

I was insolvent at the time. The total amount of discharge credit card debt was $25,550. My total assets at the time was $1,905.

Total debt with discharge and past due taxes is $47,800.

Thanks!
Greg

Lev :

Hi and welcome to our site!
to determine your insolvency using the worksheet - the difference between the two (liabilities minus assets) - $47,800 minus $1,905.
Then - you will compare these amounts - and if your insolvency is more than the amount of debt forgiven $25,550 - you will be eligible to exclude it from taxable income.
"My insolvency is more than the amount of debt forgiven" - that is a key for determination - so you report the full amount on form 982 and nothing on form 1040.

Customer:

Thank you! So what numbers go on what lines on the form?

Lev :

On form 982 - because you are insolvent - check the box 1(b)
Line 2 - list the amount $25,550 which is excluded from taxable income because of insolvency.
Part II is for reduction of tax attributes - most likely - you do not need to reduce any attributes - but still please verify.

Lev :

Let me know if you need any help.

Lev and other Tax Specialists are ready to help you