Form 982 is on the eligible for e-file list. Check all the details below before you begin to see if it will help you to file the form. It's only necessary if you are eligible for tax free treatment.
You can file Form 982 to report this cancellation of debt to the IRS. However, you may need to use the CD/Download software to file this form because the entries will need to be put in manually while in Forms mode. Forms mode is only available in the CD/Download version of Turbo Tax.
-
If you are reporting any type of debt cancellation other than qualified principal residence indebtedness, we generally recommend using the CD/Download version of TurboTax Deluxe or a higher edition
The Mortgage Relief Act is available for your main home, only your principal residence.
-
Click here for information on how to avoid tax on cancelled mortgage debt.
-
Click here for information on short sales and foreclosures.
You may be eligible to use the Form 982 if you filed bankruptcy and this debt was included in that bankruptcy or you were/are insolvent.
- For tax purposes, you only want to think about the IRS' definition of insolvency. And here it is: For purposes of relief under the cancellation of debt income rules, you are insolvent if the total of all of your liabilities was more than the fair market value of all of your assets immediately before the cancellation.
We advise a tax professional or review IRS publications noted in the attachment (4681 or 544). What is Form 982?
