How to Complete Tax Form 982
IRS Form 982 is a tax form for individuals, not businesses, to complete with their federal income tax returns. Form 982 does not have to be completed by all taxpayers because it is for "Reductions of Tax Attributes Due to Discharge of Indebtedness" and only applies to taxpayers who have had a debt discharged. In most instances, discharged debt is added to your gross income, but you are allowed to exclude that discharged debt under certain circumstances and you use Form 982 to do that.
Other People Are Reading
Instructions
-
-
1
Get Form 982. You can download it directly from the IRS website (see Resources). The form will come with some instructions.
-
2
Complete "Part I" of Form 982. This section requests general information. You will need to select the reason that the discharged debt is excluded from your gross income. You will also need to list the total amount of the discharged debt to be excluded.
-
-
3
Attach your "Reduction of Tax Attributes" statement. You will to attach a statement to Form 982 that describes what actions resulted in the discharge that is reducing your tax liability. Typically, this occurs when you use the discharge amount to reduce your basis of depreciable property.
-
4
Complete "Part II" of Form 982. Part II deals with the "Reduction of Tax Attributes" and asks questions about the circumstances and amounts to be excluded from gross income. You will not enter an amount for every item. For instance, if you have selected 1e in Part I, then you would only complete line 10b for Part II.
-
5
Complete "Part III" of Form 982. Part III is the "consent to adjustment to basis" section of the form. By completing this section, you agree to the general rule for adjustments to the basis of property. You simply list the total amount again, the tax year and the state to complete this section.
-
6
Consult the "General Instructions." When you download Form 982, a set of special instructions will also be included. There is a section that details which lines should be completed based on the type of discharged debt. Consult this section of the instructions to be certain you have completed all of the appropriate parts of the form so that you do not experience any delays in processing.
-
7
Submit Form 982 with your federal taxes. Mail it with your federal taxes to the address on your 1040.
-
1
