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Instructions for Form 982

Department of the Treasury

Internal Revenue Service

(Rev. December 2017)

Reduction of Tax Attributes Due to Discharge of Indebtedness (And Section 1082

Basis Adjustment)

Section references are to the Internal Revenue

attributes either dollar for dollar or 33

1 3

Discharge of Indebtedness. The term

Code unless otherwise noted.

cents per dollar (as explained later).

discharge of indebtedness conveys

forgiveness of, or release from, an

General Instructions

Certain individuals may need to

obligation to repay.

complete only a few lines on Form

TIP

Future Developments

982. For example, if you are

When To File

completing this form because of a

For the latest information about

File Form 982 with your federal income tax

discharge of indebtedness on a personal

developments related to Form 982 and its

return for a year a discharge of

loan (such as a car loan or credit card

instructions, such as legislation enacted

indebtedness is excluded from your

debt) or a loan for the purchase of your

after they were published, go to

IRS.gov/

income under section 108(a).

principal residence, follow the chart, later,

Form982.

to see which lines you need to complete.

The election to reduce the basis of

What’s New

Also, see Pub. 4681, Canceled Debts,

depreciable property under section 108(b)

Foreclosures, Repossessions, and

(5) and the election made on line 1d of

Qualified principal residence indebted-

Abandonments, for additional information.

Part I regarding the discharge of qualified

ness. Qualified principal residence

real property business indebtedness must

indebtedness can only be excluded from

Definitions

be made on a timely filed return (including

income after December 31, 2016, if the

extensions) and can be revoked only with

discharge is subject to an arrangement

Title 11 case. A title 11 case is a case

the consent of the IRS.

that was entered into and evidenced in

under title 11 of the United States Code

writing before January 1, 2017.

(relating to bankruptcy), but only if you are

If you timely filed your tax return without

under the jurisdiction of the court in the

making either of these elections, you can

Purpose of Form

case and the discharge of indebtedness is

still make either election by filing an

Generally, the amount by which you

granted by the court or is under a plan

amended return within 6 months of the

benefit from the discharge of

approved by the court.

due date of the return (excluding

indebtedness is included in your gross

extensions). Write “Filed pursuant to

You may know your title 11 case

income. However, under certain

section 301.9100–2” on the amended

by the chapter (such as, for

circumstances described in section 108,

TIP

return and file it at the same place you

example, chapter 7, 11, 12, or 13)

you can exclude the amount of discharged

filed the original return.

under title 11 that you sought debt relief.

indebtedness from your gross income.

You must file Form 982 to report the

exclusion and the reduction of certain tax

How To Complete the Form

IF the discharged debt you are

THEN follow these steps . . .

excluding is . . .

Qualified principal residence

1. Be sure to read the definition of qualified principal residence indebtedness in

Line

1e, later. Part or

indebtedness

all of your debt may not qualify for the exclusion on line 1e but may qualify for one of the other exclusions.

2. Check the box on line 1e. See

Line

1e, later, before checking the box if the debt was discharged

after 2016.

3. Include on line 2 the amount of discharged qualified principal residence indebtedness that is

excluded from gross income. Any amount in excess of the excluded amount may result in taxable income.

See Pub. 4681 for more information. If you disposed of your residence, you may also be required to

recognize gain on its disposition. For details, see Pub. 523, Selling Your Home.

4. If you continue to own your residence after the discharge, enter on line 10b the smaller of (a) the

amount of qualified principal residence indebtedness included on line 2 or (b) the basis (generally, your

cost plus improvements) of your principal residence.

If the discharge is in a title 11 case, you can’t check box 1e. You must check box 1a

and complete the form as discussed later under A nonbusiness debt. If you are

insolvent (and not in a title 11 case), you can elect to follow the insolvency rules by

CAUTION

checking box 1b instead of box 1e and completing the form as discussed later under A

nonbusiness debt.

Jan 23, 2018

Cat. No. 69707U

Instructions For Form 982 - Reduction Of Tax Attributes Due To Discharge Of Indebtedness (And Section 1082 Basis Adjustment)

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