Tax returns form 982

[Kingxray]

Hi all,

We are paying a chapter 13 and last year filled out form 982 (reduction of tax attributes due to discharge of indebtedness) for our federal tax return. Do we need to include this form yearly until we finish our 13 or just submit it one time? Thanks for your feedback.

[chicagoed195]

The instructions to Form 982 indicate the form should be filed in the year of discharge. For a Chapter 13 plan, that doesn't occur until the plan is completed.

[Kingxray]

Oops. I submitted form 982 with our return last year. Hopefully it won't matter. I believe it is just an informational form and doesn't affect our tax, but I better take a second look. Thanks for your help.

[teddybeardj]

Hey guys... can someone explain this form 982 and what the consequences are? This isn't something our Attorney told us about. Are we going to be paying taxes on the discharge??? Oh that would suck to no end....
I feel my blood pressure rising.... Help...

[tobee43]

an 982 is a additional page one would attach to their 1040 or 1041 (which ever is the case). ONLY when they receive a 1099 from a creditor that is either writing off a loss, or a lender than may have foreclosed on a house, on the sale (loss or gain) of real estate.

let me see if i can do this as easy as possible:


RS Form 982 is a tax form for individuals, not businesses, to complete with their federal income tax returns. the form 982 does not have to be completed by all taxpayers because it is for “Reductions of Tax Attributes Due to Discharge of Indebtedness” and only applies to taxpayers who have had a debt discharged. wiht most instances, discharged debt is added to your gross income, but you are allowed to exclude that discharged debt under certain circumstances and you use Form 982 to do that.

you do not need to fill it out until you receive something from one of your creditors, a cc lender, a mortgage lender etc., which is usually either a 1099A or 1099C. not all creditors issue them and they may not even do it the year they wrote off the debt. the purposes of these tax form basically is it is to allow the creditor to advise the irs of their loss and or your gain, as well as when you fill out on and attach it to your tax form you are either doing one of a number of choices of why this is and should not be viewed as "income" to you.

those reasons vary on the form from ( and i can't copy and paste this exact):

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 . . . . . . . . . etc....


of course in most situation we see on this board one would mark either 1a or 1b. again, you only do a 982 once you receive a 1099. hope that helps a bit.

there are more sections to the form and one would complete them with the applicable information of their particular circumstance.

it is best to consult you tax specialist if you do receive one of these 1099's