Fillable Printable Form 982

What is a Form 982 ?

Form 982, whose complete name is Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), is an IRS's form for one whose canceled debt is for a qualified principal residence indebtedness, aka mortgage debt relief. Form 982 is used to report the exclusion and the reduction of certain tax attributes either dollar for dollar or 331/3 cents per dollar. Use HandyPDF service to download blank or edit and sign fillable Form 982 online.

Fillable Printable Form 982

What is a Form 982 ?

Form 982

(Rev. January 2016)

Department of the Treasury

Internal Revenue Service

Reduction of Tax Attributes Due to Discharge of

Indebtedness (and Section 1082 Basis Adjustment)

▶

Attach this form to your income tax return.

OMB No. 1545-0046

Attachment

Sequence No.

Name shown on return Identifying number

Part I

General Information (see instructions)

1 Amount excluded is due to (check applicable box(es)):

a Discharge of indebtedness in a title 11 case . . . . . . . . . . . . . . . . . . . . . . . .

b Discharge of indebtedness to the extent insolvent (not in a title 11 case) . . . . . . . . . . . . . . .

c Discharge of qualified farm indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .

d Discharge of qualified real property business indebtedness . . . . . . . . . . . . . . . . . . .

e Discharge of qualified principal residence indebtedness . . . . . . . . . . . . . . . . . . . .

2 Total amount of discharged indebtedness excluded from gross income . . . . . . . . . 2

Do you elect to treat all real property described in section 1221(a)(1), relating to property held for sale to

customers in the ordinary course of a trade or business, as if it were depreciable property? . . . . . .

Yes No

Part II

Reduction of Tax Attributes. You must attach a description of any transactions resulting in the reduction in

basis under section 1017. See Regulations section 1.1017-1 for basis reduction ordering rules, and, if applicable,

required partnership consent statements. (For additional information, see the instructions for Part II.)

Enter amount excluded from gross income:

For a discharge of qualified real property business indebtedness applied to reduce the basis of

depreciable real property . . . . . . . . . . . . . . . . . . . . . . . .

That you elect under section 108(b)(5) to apply first to reduce the basis (under section 1017) of

depreciable property . . . . . . . . . . . . . . . . . . . . . . . . . .

Applied to reduce any net operating loss that occurred in the tax year of the discharge or carried

over to the tax year of the discharge . . . . . . . . . . . . . . . . . . . . .

7 Applied to reduce any general business credit carryover to or from the tax year of the discharge . 7

Applied to reduce any minimum tax credit as of the beginning of the tax year immediately after the

tax year of the discharge . . . . . . . . . . . . . . . . . . . . . . . . .

Applied to reduce any net capital loss for the tax year of the discharge, including any capital loss

carryovers to the tax year of the discharge . . . . . . . . . . . . . . . . . . .

10a

Applied to reduce the basis of nondepreciable and depreciable property if not reduced on line 5.

DO NOT use in the case of discharge of qualified farm indebtedness . . . . . . . . . .

10a

Applied to reduce the basis of your principal residence. Enter amount here ONLY if line 1e is

checked . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10b

11 For a discharge of qualified farm indebtedness applied to reduce the basis of:

Depreciable property used or held for use in a trade or business or for the production of income if

not reduced on line 5 . . . . . . . . . . . . . . . . . . . . . . . . . .

11a

b Land used or held for use in a trade or business of farming . . . . . . . . . . . . .

11b

c Other property used or held for use in a trade or business or for the production of income . . . 11c

Applied to reduce any passive activity loss and credit carryovers from the tax year of the discharge

Applied to reduce any foreign tax credit carryover to or from the tax year of the discharge . . .

Part III

Consent of Corporation to Adjustment of Basis of Its Property Under Section 1082(a)(2)

Under section 1081(b), the corporation named above has excluded $ from its gross income

for the tax year beginning

and ending .

Under that section, the corporation consents to have the basis of its property adjusted in accordance with the regulations prescribed

under section 1082(a)(2) in effect at the time of filing its income tax return for that year. The corporation is organized under the laws

of .

(State of incorporation)

Note: You must attach a description of the transactions resulting in the nonrecognition of gain under section 1081.

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 17066E

Form 982 (Rev. 1-2016)

▶

Information about Form 982 and its instructions is at www.irs.gov/form982.

Form 982 (Rev. 1-2016)

Page 2

General Instructions

Section references are to the Internal Revenue Code unless

otherwise noted.

Future developments. For the latest information about

developments related to Form 982 and its instructions, such as

legislation enacted after they were published, go to

www.irs.gov/form982.

Purpose of Form

Generally, the amount by which you benefit from the discharge

of indebtedness is included in your gross income. However,

under certain circumstances described in section 108, you can

exclude the amount of discharged indebtedness from your

gross income.

You must file Form 982 to report the exclusion and the

reduction of certain tax attributes either dollar for dollar or 33

cents per dollar (as explained below).

How To Complete the Form

IF the discharged debt

you are excluding is . . .

THEN follow these steps . . .

Qualified principal

residence indebtedness

1. Be sure to read the definition of qualified principal residence indebtedness in the instructions for line 1e on page

4. Part or all of your debt may not qualify for the exclusion on line 1e but may qualify for one of the other exclusions.

2. Check the box on line 1e.

3. Include on line 2 the amount of discharged qualified principal residence indebtedness that is excluded from gross

income. Any amount in excess of the excluded amount may result in taxable income. See Pub. 4681 for more

information. If you disposed of your residence, you may also be required to recognize a gain on its disposition. For

details, see Pub. 523, Selling Your Home.

4. If you continue to own your residence after the discharge, enter on line 10b the smaller of (a) the amount of

qualified principal residence indebtedness included on line 2 or (b) the basis (generally, your cost plus improvements)

of your principal residence.

▲

CAUTION

If the discharge occurs in a title 11 case, you can’t check box 1e. You must check box 1a and complete

the form as discussed below under A nonbusiness debt. If you are insolvent (and not in a title 11 case),

you can elect to follow the insolvency rules by checking box 1b instead of box 1e and completing the

form as discussed below under A nonbusiness debt.

A nonbusiness debt (other

than qualified principal

residence indebtedness,

such as a car loan or credit

card debt)

Follow these instructions if you don’t have any of the tax attributes listed in Part II (other than a basis in

nondepreciable property). Otherwise, follow the instructions for Any other debt below.

1. Check the box on line 1a if the discharge was made in a title 11 case (see Definitions, later) or the box on line 1b if

the discharge occurred when you were insolvent (see Line 1b, later).

2. Include on line 2 the amount of discharged nonbusiness debt that is excluded from gross income. If you were

insolvent, don’t include more than the excess of your liabilities over the fair market value of your assets.

3. Include on line 10a the smallest of (a) the basis of your nondepreciable property, (b) the amount of the

nonbusiness debt included on line 2, or (c) the excess of the aggregate bases of the property and the amount of

money you held immediately after the discharge over your aggregate liabilities immediately after the discharge.

Any other debt Use Part I of Form 982 to indicate why any amount received from the discharge of indebtedness should be excluded

from gross income and the amount excluded.

Use Part II to report your reduction of tax attributes. The reduction must be made in the following order unless you

check the box on line 1d for qualified real property business indebtedness or make the election on line 5 to reduce

basis of depreciable property first.

1. Any net operating loss (NOL) for the tax year of the discharge (and any NOL carryover to that year) (dollar for

dollar);

2. Any general business credit carryover to or from the tax year of the discharge (33

/3 cents per dollar);

3. Any minimum tax credit as of the beginning of the tax year immediately after the tax year of the discharge (33

cents per dollar);

4. Any net capital loss for the tax year of the discharge (and any capital loss carryover to that tax year) (dollar for

dollar);

5. The basis of property (dollar for dollar);

6. Any passive activity loss (dollar for dollar) and credit (33

/3 cents per dollar) carryovers from the tax year of the

discharge; and

7. Any foreign tax credit carryover to or from the tax year of the discharge (33

/3 cents per dollar).

Use Part III to exclude from gross income under section 1081(b) any amounts of income attributable to the transfer

of property described in that section.

Form 982 (Rev. 1-2016)

Page 3

TIP

Certain individuals may need to complete only a few

lines on Form 982. For example, if you are completing

this form because of a discharge of indebtedness on

a personal loan (such as a car loan or credit card

debt) or a loan for the purchase of your principal residence,

follow the chart, earlier, to see which lines you need to

complete. Also, see Pub. 4681, Canceled Debts, Foreclosures,

Repossessions, and Abandonments, for additional information.

Definitions

Title 11 Case

A title 11 case is a case under title 11 of the United States Code

(relating to bankruptcy), but only if you are under the jurisdiction

of the court in the case and the discharge of indebtedness is

granted by the court or is under a plan approved by the court.

Discharge of Indebtedness

The term discharge of indebtedness conveys forgiveness of, or

release from, an obligation to repay.

When To File

File Form 982 with your federal income tax return for a year a

discharge of indebtedness is excluded from your income under

section 108(a).

The election to reduce the basis of depreciable property

under section 108(b)(5) and the election made on line 1d of Part

I regarding the discharge of qualified real property business

indebtedness must be made on a timely filed return (including

extensions) and can be revoked only with the consent of the

IRS.

If you timely filed your tax return without making either of

these elections, you can still make either election by filing an

amended return within 6 months of the due date of the return

(excluding extensions). Write “Filed pursuant to section

301.9100-2” on the amended return and file it at the same place

you filed the original return.

Specific Instructions

Part I

▲

CAUTION

The time for making a section 108(i) election has

passed. If you made an election under section 108(i)

to defer income from the discharge of business debt

arising from the reacquisition of a debt instrument

in 2009 or 2010, don’t report the amount deferred under the

election in lines 1a through 1d and line 2.

Line 1b

The insolvency exclusion doesn’t apply to any discharge that

occurs in a title 11 case. It also doesn’t apply to a discharge of

qualified principal residence indebtedness (see the instructions

for line 1e on page 4) unless you elect to have the insolvency

exclusion apply instead of the exclusion for qualified principal

residence indebtedness.

Check the box on line 1b if the discharge of indebtedness

occurred while you were insolvent. You were insolvent to the

extent that your liabilities exceeded the fair market value (FMV)

of your assets immediately before the discharge. For details and

a worksheet to help calculate insolvency, see Pub. 4681.

Example. You were released from your obligation to pay your

credit card debt in the amount of $5,000. The FMV of your total

assets immediately before the discharge was $7,000 and your

liabilities were $10,000. You were insolvent to the extent of

$3,000 ($10,000 of total liabilities minus $7,000 of total assets).

Check the box on line 1b and include $3,000 on line 2.

Line 1c

Check this box if the income you exclude is from the discharge

of qualified farm indebtedness. The exclusion relating to

qualified farm indebtedness doesn’t apply to a discharge that

occurs in a title 11 case or to the extent you were insolvent.

Qualified farm indebtedness is the amount of indebtedness

incurred directly in connection with the trade or business of

farming. In addition, 50% or more of your aggregate gross

receipts for the three tax years preceding the tax year in which

the discharge of such indebtedness occurs must be from the

trade or business of farming. For more information, see sections

108(g) and 1017(b)(4).

The discharge must have been made by a qualified person.

Generally, a qualified person is an individual, organization, etc.,

who is actively and regularly engaged in the business of lending

money. This person can’t be related to you, be the person from

whom you acquired the property, or be a person who receives a

fee with respect to your investment in the property. A qualified

person also includes any federal, state, or local government or

agency or instrumentality thereof.

If you checked line 1c and didn’t make the election on line 5,

the debt discharge amount will be applied to reduce the tax

attributes in the order listed on lines 6 through 9. Any remaining

amount will be applied to reduce the tax attributes in the order

listed on lines 11a through 13.

You can’t exclude more than the total of your (a) tax attributes

(determined under section 108(g)(3)(B)) and (b) basis of property

used or held for use in a trade or business or for the production

of income. Any excess is included in income.

Line 1d

If you check this box, the discharge of qualified real property

business indebtedness is applied to reduce the basis of

depreciable real property on line 4. The exclusion relating to

qualified real property business indebtedness doesn’t apply to a

discharge that occurs in a title 11 case or to the extent you were

insolvent.

Qualified real property business indebtedness is indebtedness

(other than qualified farm indebtedness) that (a) is incurred or

assumed in connection with real property used in a trade or

business, (b) is secured by that real property, and (c) with

respect to which you have made an election under this

provision. This provision doesn’t apply to a corporation (other

than an S corporation).

Indebtedness incurred or assumed after 1992 isn’t qualified

real property business indebtedness unless it is either (a) debt

incurred to refinance qualified real property business

indebtedness incurred or assumed before 1993 (but only to the

extent the amount of such debt doesn’t exceed the amount of

debt being refinanced) or (b) qualified acquisition indebtedness.

Qualified acquisition indebtedness is (a) debt incurred or

assumed to acquire, construct, reconstruct, or substantially

improve real property that is secured by such debt and (b) debt

resulting from the refinancing of qualified acquisition

indebtedness to the extent the amount of such debt doesn’t

exceed the amount of debt being refinanced.

You can’t exclude more than the excess of the

outstanding principal amount of the debt (immediately before

the discharge) over the net FMV (as of that time) of the

property securing the debt reduced by the outstanding principal

amount of other qualified real property business indebtedness

secured by that property (as of that time). The amount excluded

is further limited to the aggregate adjusted basis (as of the first

day of the next tax year or, if earlier, the date of disposition) of

depreciable real property (determined after any reductions

under sections 108(b) and (g)) you held immediately before the

discharge (other than property acquired in contemplation of the

discharge). Any excess is included in income.

Form 982 (Rev. 1-2016)

Page 4

Line 1e

Check this box if the income you exclude is from discharge of

qualified principal residence indebtedness. Also, be sure you

complete line 2 (and line 10b if you continue to own the

residence after discharge). However, if the discharge occurs in a

title 11 case, you must check the box on line 1a and not this

box. If you are insolvent (and not in a title 11 case), you can

elect to follow the insolvency rules by checking box 1b instead

of checking this box. For more information, see Pub. 4681.

Principal residence. Your principal residence is your main

home, which is the home where you ordinarily live most of the

time. You can have only one main home at any one time.

Qualified principal residence indebtedness. This

indebtedness is a mortgage you took out to buy, build, or

substantially improve your main home. It also must be secured

by your main home. If the amount of your original mortgage is

more than the cost of your main home plus the cost of any

substantial improvements, only the debt that is not more than

the cost of your main home plus improvements is qualified

principal residence indebtedness. Any debt secured by your

main home that you use to refinance qualified principal

residence indebtedness is treated as qualified principal

residence indebtedness, but only up to the amount of the old

mortgage principal just before the refinancing. Any additional

debt you incurred to substantially improve your main home is

also treated as qualified principal residence indebtedness.

Amount eligible for the exclusion. The exclusion applies only

to debt discharged after 2006. The maximum amount you can

treat as qualified principal residence indebtedness is $2 million

($1 million if married filing separately). You can’t exclude from

gross income discharge of qualified principal residence

indebtedness if the discharge was for services performed for the

lender or on account of any other factor not directly related to a

decline in the value of your residence or to your financial

condition.

Ordering rule. If only a part of a loan is qualified principal

residence indebtedness, the exclusion applies only to the extent

the amount discharged exceeds the amount of the loan

(immediately before the discharge) that is not qualified principal

residence indebtedness. For example, assume your main home

is secured by a debt of $1 million, of which $800,000 is qualified

principal residence indebtedness. If your main home is sold for

$700,000 and $300,000 of debt is discharged, only $100,000 of

the debt discharged can be excluded (the $300,000 that was

discharged minus the $200,000 of nonqualified debt). The

remaining $200,000 of nonqualified debt may qualify in whole or

in part for one of the other exclusions, such as the insolvency

exclusion.

Line 2

Enter the total amount excluded from your gross income due to

discharge of indebtedness under section 108. If you checked

any box on lines 1b through 1e, don’t enter more than the limit

explained in the instructions for those lines. If you checked line

1a, 1b, or 1c, this amount won’t necessarily equal the total

reductions on lines 5 through 13 (excluding line 10b) because

the debt discharge amount may exceed the total tax attributes.

If you checked line 1e, this amount won’t necessarily equal the

total basis reduction on line 10b (which is required only if you

continue to own the residence after the discharge).

See section 382(l)(5) for a special rule regarding a reduction of

a corporation’s tax attributes after certain ownership changes.

Line 3

You can elect under section 1017(b)(3)(E) to treat all real

property held primarily for sale to customers in the ordinary

course of a trade or business as if it were depreciable property.

This election doesn’t apply to the discharge of qualified real

property business indebtedness. To make the election, check

the “Yes” box.

Part II

Basis Reduction

If you check any of the boxes on lines 1a through 1c, you can

elect, by completing line 5, to apply all or a part of the debt

discharge amount to first reduce the basis of depreciable

property (including property you elected on line 3 to treat as

depreciable property). Any balance of the debt discharge

amount will then be applied to reduce the tax attributes in the

order listed on lines 6 through 13 (excluding line 10b). You must

attach a statement describing the transactions that resulted in

the reduction in basis under section 1017 and identifying the

property for which you reduced the basis. If you don’t make the

election on line 5, complete lines 6 through 13 (excluding line

10b) to reduce your attributes. See section 1017(b)(2) and (c) for

limitations of reductions in basis on line 10a.

Line 7

If you have a general business credit carryover to or from the tax

year of the discharge, you must reduce that carryover by 33

cents for each dollar excluded from gross income. See Form

3800, General Business Credit, for more details on the general

business credit, including rules for figuring any carryforward or

carryback.

Line 10a

In the case of a title 11 case or insolvency, the reduction in

basis is limited to the aggregate of the basis of your property

immediately after the discharge over the aggregate of your

liabilities immediately after the discharge. However, this limit

doesn’t apply to a reduction in basis reported on line 5 pursuant

to section 108(b)(5).

Line 10b

If box 1e is checked and you continue to own the residence

after discharge, enter the smaller of:

• The part of line 2 that is attributable to the exclusion of

qualified principal residence indebtedness, or

• The basis of your main home.

Part III

Adjustment to Basis

Unless it specifically states otherwise, the corporation, by filing

this form, agrees to apply the general rule for adjusting the basis

of property (as described in Regulations section 1.1082-3(b)).

If the corporation desires to have the basis of its property

adjusted in a manner different from the general rule, it must

attach a request for variation from the general rule. The request

must show the precise method used and the allocation of

amounts.

Consent to the request for variation from the general rule will

be effective only if it is incorporated in a closing agreement

entered into by the corporation and the Commissioner of

Internal Revenue under the rules of section 7121. If no

agreement is entered into, then the general rule will apply in

determining the basis of the corporation’s property.

Form 982 (Rev. 1-2016)

Page 5

Paperwork Reduction Act Notice. We ask for the information

on this form to carry out the Internal Revenue laws of the United

States. You are required to give us the information. We need it

to ensure that you are complying with these laws and to allow

us to figure and collect the right amount of tax.

You aren’t required to provide the information requested on a

form that is subject to the Paperwork Reduction Act unless the

form displays a valid OMB control number. Books or records

relating to a form or its instructions must be retained as long as

their contents may become material in the administration of any

Internal Revenue law. Generally, tax returns and return

information are confidential, as required by section 6103.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated burden

for individual taxpayers filing this form is approved under OMB

control number 1545-0074 and is included in the estimates

shown in the instructions for their individual income tax return.

The estimated burden for all other taxpayers who file this form is

shown as follows: Recordkeeping, 5 hr., 58 min.; Learning

about the law or the form, 2 hr., 34 min.; Preparing and

sending the form to the IRS, 2 hr., 48 min.

If you have comments concerning the accuracy of these time

estimates or suggestions for making this form simpler, we would

be happy to hear from you. See the instructions for the tax

return with which this form is filed.