IRS Form 982 - Reducing Tax Attributes of Depreciable Property for Cancelled Debt If debt is canceled in a bankruptcy case or during insolvency you must use the excluded amount of debt to reduce certain “tax attributes” including the basis of certain assets as well as...
You are insolvent when your liabilities exceed the Fair Market Value (FMV) of your assets. It is important to determine your liabilities and the FMV of your assets immediately before the cancellation of debt to determine whether or not you are insolvent and by how much. Exclude...
When a rental home secured by a recourse loan is sold short you incur a loss on the disposition of the rental properties requiring the report of a sale as well as any income from the cancellation of debt. The cancellation of debt income is excluded from gross income to the extent you...
If you are forgiven debt and that forgiven debt is not considered income then you should prepare and file IRS Form 982 - Reduction of Tax Attributes Due to Discharge of Indebtedness. Generally, the amount by which you benefit from the discharge of indebtedness is included in your gross income....
Debt that is forgiven is considered income for taxes purposes and is reportable to the IRS. The debt forgiven is reported by the lender to the IRS on form 1099-C. The debt forgiven is reported by the taxpayer as other income on Form 1040, Line...