Form 982 (Refresher)

[ILLMAS]

Can someone guide me on this form, doing one for the first time this year, but in this case there was no bankruptcy. I already recorded the sale on Form 4797 and there is gain.

Cost 165K

A/C Depr. -55K

Basis 110K

From 1099-C 145K

Less Basis -110K

Gain 35K

On Form 982 I have checked off 1d, box 2 145K and box 3 Yes. Is this the ony things that get filled out?

Thanks

MAS

[Jack from Ohio]

Did the client receive a 1099_A or a 1099-C? If only a 1099-A, form 982 does not apply.

1099-A shows change of ownership i.e. sale.

1099- C shows cancellation of debt and is the only place a form 982 applies.

Client may recieve neither, one or both. There may be many months between the client receiving the two forms.

[ILLMAS]

They did receive a 1099-C.

Thanks

MAS

[Jack from Ohio]

They did receive a 1099-C.

Thanks

MAS

Was this their primary residence?

[ILLMAS]

Not in recent years, the last year they lived there was in 2005, the short-sale happened in Jan. 2011.

MAS

[grandmabee]

if it was the primary residence and they had a helco loan on it also how do you figure what is cod

[ILLMAS]

Anyone?? TP has not lived in the house for last 5 years, but continued to own it up to the day of the short sale. Currently there is a gain, however I just want to make sure I have filled out form 982 correctly. "On Form 982 I have checked off 1d, box 2 145K and box 3 Yes. Is this the ony things that get filled out?"

Ownership and Use Tests

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To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

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  Owned the home for at least 2 years (the ownership test), and YES
  
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  Lived in the home as your main home for at least 2 years (the use test). OUT OF THE LAST 5 YEARS OF OWNERSHIP, NO TP HAD A SECOND HOME
  
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[joanmcq]

TP had a second home, so no principal residence exclusion. You'll have to look to see if any other exclusions apply. Can't exclude the gain under principal residence either.