Do I need to file form 982 due to cancelation of debt in a CH 13 bankruptcy?

[rr44]

Do I need to file form 982 due to a cancelation of debt in a CH 13 bankruptcy, in the year following the bankruptcy completion?

And my other question is, can capital loss, carry forward (on line 6 of 1040) offset this cancelation of debt?  And would this also be reported on form 982?

[ThomasM125 · Accepted solution]

You need to report the cancellation of debt in the year it was officially cancelled, and complete form 982 in that year as well, which I assume would be the year your bankruptcy was finalized.

A capital loss carryover cannot be applied to the cancellation of debt income, except for the $3,000 per year write off you get anyways against ordinary income. It would not be reported on form 982.

You would use form 982 to apply to have the cancellation of debt be exempt from taxation, which may be possible under bankruptcy.