Form 982 Reduction in Basis -NOL

[equinecpa]

I have a client who has a 1099-C for approx $9000. She was insolvent at the time of the debt cancellation so I am filing form 982.

For the year in question other than the 1099-C income she has losses of $14,000 which she will carryforward.

She has no remaining basis in any assets so she'll need to reduce NOL by 9000. So does this make the form 982 a wash since if I didn't file this form and included the 1099-c in income she'd have an NOL carryforward of $5000, and if I file the form 982 she'll have a NOL of $14000-9000=$5000?

Just wondering if I'm causing myself more work?

Carolyn

[mactoolsix]

I have always filed the 982 - I think is would be required.

For NOLs enter in part II line 6.

[TXEA]

You do not have to file Form 982 if you pick up the debt cancellation as income in the year the debt is discharged.

Form 982 is only used if you want to take advantage of the insolvency rules.