IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, is a tax form used to report the reduction of certain tax attributes, such as basis in assets and net operating losses, when a debt is discharged. This can occur in a variety of situations, such as bankruptcy, foreclosure, or a debt settlement.
When to File Form 982
You must file Form 982 if you have a discharge of indebtedness that results in the reduction of tax attributes. This includes both taxable and nontaxable discharges of indebtedness.
How to File Form 982
Form 982 is filed with your annual income tax return. You can download the form and instructions from the IRS website. When completing the form, you will need to provide information about the discharged debt, such as the amount of debt, the date of discharge, and the reason for the discharge. You will also need to calculate the amount of tax attributes that are reduced as a result of the discharge.
Tax Consequences of Filing Form 982
The reduction of tax attributes due to a discharge of indebtedness can have several tax consequences. For example, it can result in an increase in your taxable income, a decrease in your net operating loss carryforward, and a decrease in your basis in assets.
Getting Help with Form 982
If you need help completing Form 982, you can contact the IRS or a tax professional.