IRS Form 982...

Had cancelled debt in 2011.  Did the insolvency worksheets.  Partially insolvent.  Attempting to complete Form 982.  Checked box 1b. Entered excluded/insolvent amount on Line 2.  Called IRS to make sure done correctly.  Said I also had to answer line 10a.  Didn't understand his explanation.  Still confused what this means.  Please help.  What goes on line 10a?  Does TurboTax have the capability to send the 982 form as well?  The IRS rep said I could still e-file if TurboTx had the software/capability.
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    The software does definetly have the capability to efile both the Form 982 and insolvency worksheets. On your question regarding 10a: Applied to reduce the basis of nondepricable and depricible property if not reduced on line 5. That can be a tricky question since cancelling a debt is such a complex subject.  I have filled out this form on my own return in the past and I usually do not worry about blocks 4-13. Block 10b seems to apply if your a business. and have Depricable and Non-Depricable property.

    The definition of Deprication is:
    Any type of asset that is eligible for depreciation treatment. Depreciable property can include vehicles, real estate, computers and office equipment, machinery and heavy equipment, and several other categories of assets. Depreciable property items tend to be long-term assets.

    So my take on block 10b is that the IRS rep was wrong and its not required unless you actually have depricible or nondepricible property that your trying to reduce the basis in.

    Its a complex subject though so I would probably call Turbotax Tax Advice team to be sure. They are staffed by actual CPA's trained in this area.
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