982???

[Unregistered]

Does anyone know what a 982 is? It came out on my printout for my cliient. It reads reduction of tax attributes due to discharge of indebtedness. What is this about?

[taxmandan]

982

It's used to show that someone is insolvent at the time of a discharge of indebtiness. That way they won't have to pay taxes on the amount that was discharged. Don't know why it would print without information being entered in the software.

[JoshinNC]

did the taxpayer have a 1099C

if so, the software may have determined the amount as nontaxable and printed the form.

This is what would generate the need for a 982.

[Unregistered]

if so, the software may have determined the amount as nontaxable and printed the form.

This is what would generate the need for a 982.

Yes he did have a 1099-C and it was all taxable. Do I fill out the 982 or just keep it in the file? I have never had this form in 8 years!

[taxmandan]

982

If the debt is taxable no form 982 is needed. It is only used to tell the IRS that the debt is not taxable. If you file the 982, theIRS will automatically deny it and demand proof that TP was insolvent and the debt isn't taxable. Then the TP has to send theIRS all the information on assets and liabilities on the date of discharge to prove that he was insolvent, a very difficult task. Still not sure why your software generated the form without input onto it by the preparer.

[Unregistered]

If the debt is taxable no form 982 is needed. It is only used to tell the IRS that the debt is not taxable. If you file the 982, theIRS will automatically deny it and demand proof that TP was insolvent and the debt isn't taxable. Then the TP has to send theIRS all the information on assets and liabilities on the date of discharge to prove that he was insolvent, a very difficult task. Still not sure why your software generated the form without input onto it by the preparer.

I have Drake software and I called them, they said do nothing because it was all taxable.