Form 982

[Eli]

Client received a 1099-C for a foreclosed home. The amount of the cancelled debt is $33217. I am using form 982 & checked off the box in Line 1E & put the amount of the debt in Line 2. Should this change the amount of tax owed? Without including the cancelled debt the taxpayers would receive a $2800+ refund. If I include the cancelled debt they owe $2700+ in additional tax. I have included the 982 & it still shows tax due of $2700+

Am I missing something somewhere?

Thanks!

Eli

[joanmcq]

You need to manually enter on line 21 of the 1040 " cancelled debt excluded on form 982" or something similar with a negative value of the amount cancelled.

[grandmabee]

SO YOU put in the amount cancelled on line 21 and then back out thru the 982?. no number shows on line 21 but worksheet will give the details?

is that how you are doing it?

[jainen]

>>Am I missing something somewhere?<<

Yes, you need to reduce tax attributes in Part II. If you use line 10b you will also have to change the amount of gain or loss on the foreclosure.

[joanmcq]

Hey, I've got one of these, and before I send her the bad news, let me see if I'm missing any chances to decrease the amount of COD I have to put in income. There was a cash out refi, so only half of $18k can be excluded under QPRI. (it was jointly owned). She was insolvent by another $6500. I'm reducing the tax attributes on her old RV, and a car. For the amount insolvent. Anything?