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Debt Relief – Insolvency – Bankruptcy Information » Bankruptcy Help, Foreclosure Help, Insolvency » Form 982 Short Sale

Form 982 Short Sale

A lot of people nowadays are being sent 1099-C to settle individual debts or debt consolidation. Upon receiving this form, make sure qualification is adequate in case one applies for IRS Form 982 to reduce the taxable income from cancelled debt. Checking box 1a means a discharge of indebtedness. The amount discharged for bankruptcy is recorded on line 2a and should only be listed on line 10a if one likes to retain non-depreciable assets and if the amount is above the remaining debt after the bankruptcy discharge.

One other circumstance that the debtor can be charged by the taxman is if form 982 short sale conditions were not met. A short sale occurs when an excess exists on the amount the debtor owes the creditor upon filing for bankruptcy. The excess is viewed by the IRS as ordinary taxable income unless off course the debtor applied for form 982.

People with credit card problems are usually hounded by the IRS after settling their credit card debt. Forgiven credit card obligation is a taxable income under the law. However taxpayers may apply for exclusion so reduction on the taxable income from debt forgiveness is valid. Using form 982 credit card debt will lessen the burden of the debtor.

The exclusion comprises obligations discharged during filing of bankruptcy by insolvent credit card holders. These IRS forms help people with huge debts to manage their financial standing efficiently.

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Filed under: Bankruptcy Help, Foreclosure Help, Insolvency

3 Responses to "Form 982 Short Sale"

  1. [...] Read more … Share this:TwitterFacebookLike this:LikeBe the first to like this post. [...]
  2. [...] the misery as a result of an excessive amount of debt could be solved by filing form 982 bankruptcy. Via this action the IRS can not tax the debtor due to the fact debt to revenue is considered [...]
  3. [...] the misery as a result of an excessive amount of debt might be solved by filing form 982 bankruptcy. Via this action the IRS can’t tax the debtor since debt to income is regarded as [...]

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