Discharged Chpt 7 and Filing Taxes

[tjc]

I am very new here and never had this issue arise during or after a BK filing. We were discharged in June 2010 in a Chapter 7 BK. Everything went pretty smooth and were able to breathe a little bit easier without the debt hanging over us.

My question is this: I've heard one should file a Form 982 for BK, however, it is a definite NECESSITY to do so? I normally use TaxAct to file our taxes and it has been a breeze up to this point. Now with this form we may or may not HAVE to file due to BK, I'm completely lost! I don't understand what I need to fill out and what I leave at $0. I've read the IRS publication on this and don't understand it at all. I'm no dummy, but the mumbo-jumbo in those publications are ridiculous and difficult to comprehend.

So do we HAVE to file form 982 or no? And if so, can someone help me with what info I need to enter? Do I need to "reduce tax attributes"? And if so, how?
I really do not want to take our taxes to a CPA or H&R Block when it costs so little to do it at home. It was quite easy...at least until now. (Although I may have to take it this year if I can't make heads or tails of all this)

If it makes any difference, we are still living in our home but it was NOT reaffirmed. We did reaffirm on our car which is and always has been current, and we do not owe any support, liens, or judgements. The case itself was fairly simple as we had no assets for the trustee to take.

Help? Anyone?

[Charlie777]

I used the HR Block product. Filled out Form 982 with the total debt discharged and checked "Title 11" (Title 11 is the BK Act). Because the debt was discharged in BK there's no reduction of tax attributes.

[tjc]

Thank you for the quick response! I will have to go back over the TaxAct forms and see if I can figure it out. If not, I'll check out H&R Block. Did you do your taxes online? Was it fairly straight forward and simple with H&R Block's product?

This is the part that's tripping me up:
Debts cancelled in bankruptcy. Debt cancelled in a Title 11 bankruptcy case is not included in your gross income if the cancellation is granted by the court or under a plan approved by the court. Instead, certain losses, credits, and basis of property must be reduced by the amount excluded from income. These losses, credits, and basis of property are called "tax attributes."

[Charlie777]

I've used HR Blocks packaged product for a number of years, before that TurboTax. Your citation seems odd, I think the reduction attributes is only for insolvency, and that's the way the HR Block product prepared the return.

[tjc]

The part I notated on here came from TaxAct's website, which is why it was tripping me up so much, because I thought it wouldn't be noted if it wasn't necessary to list this stuff. But, I did check out H&R Block's online filing and it's much more simple to understand the BK issue with that software. TaxAct is normally a breeze, but they sure made this part a lot more difficult than it had to be.
I should note though that we did not turn over the house in our BK. We are still living in the home and recently received a Permanent Modification. Does this make a difference?

One last question: How did you determine your total discharged debt? Say for instance our home's FMV was listed at $100,000 (much lower than appraised for), but we owed $90,907. I would use the $90,907 amount when determining total discharge amount correct?
Our schedules list everything with every dollar amount, however there's no "final total" to be discharged, and the Discharge papers do not reflect a dollar amount.