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Questions About Form 982

I am doing a short sale. How can I have the taxes waived on the 1099 I will receive?

The amt of debt forgiven will be about $100K. The lender will give me a 1099 for taxes on the 100K. I have been told that IRS Form 982 will waive these taxes? How does it work? Do I have to qualify in some way?

Industry Expert answers:

According to this website:

It looks like that you have to be insolvent at the time.

An accountant should help you out. I do short sales in California and I think you’re in California as well so I hope you’re able to find your answer.


How to file an amended return after receiving a 1099c but plan to file a 982 for a discharge of the debt?

I filed my taxes, they were accepted and my refund was returned. However I just received a 1099-C from the short sale of our home in 2010. I now need to amend my return. The tricky part is this 1099-C qualifies for the mortgage debt relief act and it will not effect or change anything. So I have to do an amended return and include the 982 form showing the discharge of the debt. My question is, do I do the amended return and just leave everything blank and in part III just explain that I received the 1099 C and qualify for the mortgage debt relief act; and include the form 982?

Thank you for any insight!

Industry Expert answers:

You “amend a tax return” when you need to change information on a tax return that’s considered filed and accepted by the government:

A mailed tax return is considered filed and accepted on the postmarked date of the return.
An e-filed tax return is considered filed and accepted when the government notifies you that your tax return has been accepted.
If your return has been rejected, you can correct your original return and then e-file again. You don’t need to amend the return.
If your return has been accepted, you can amend it.
If your return is pending, you need to wait to until it’s accepted or rejected so you know whether to amend it or correct it.

Why do I need to amend a tax return?
After filing your return, you need to amend it if you:

Received another tax form after you filed, such as a W-2 or 1099
Forgot to report some income, such as a W-2 or self-employment income
Received a corrected W-2 or corrected statements from your broker or financial institution
Missed deductions or credits you could’ve claimed
Claimed deductions or credits you weren’t eligible for
Entered a wrong amount
Didn’t claim a dependent you were entitled to, or claimed someone you shouldn’t have
Chose the wrong filing status
Note: You don’t need to amend your return if you received an IRS notice only about math errors or if the IRS asks you for additional forms. Follow the IRS’s instructions to submit the requested information.

Can I e-file an amended tax return?

No. You must print and mail an amended return.

I don’t need to amend my tax return. How do I delete Form 1040X?
If you started amending your return and discover that you don’t need to amend, click here for instructions to delete Form 1040X.

Important: If you remove Form 1040X, only the form is removed. Any changes you’ve already made in TurboTax are unaffected.

Click here for instructions to delete the state amendment form.

I only need to amend my state tax return. Can I use TurboTax?
Yes. If the information you change affects just your state return, you can amend only your state return in TurboTax.

How do I start over on an amended tax return?
You can remove Form 1040X from your return and start over.

Important: If you remove Form 1040X, only the form is removed. Any changes you’ve already made in TurboTax are unaffected.

Where do I mail an amended tax return?
The mailing address is printed on the filing instructions for the amended return.

Note: If you amended a prior return with a prior version of TurboTax, visit the Where to File Addresses page on the IRS site for the current mailing address.

Which forms can I amend using Form 1040X?
You can use Form 1040X to amend Form 1040, 1040A, or 1040EZ.

TurboTax can help you amend Form 1040, 1040A, or 1040EZ.

How long do I have to amend a tax return?
You can file an amended return within 3 years of the date you filed the original return or within 2 years of the date on which you paid the tax due on the return, whichever is later.

Can I extend the deadline for amending a tax return?
Maybe. Certain tax situations, such as net operating loss (NOL) carrybacks, general business credit carrybacks, or situations involving bad debts, may be eligible for extended amendment deadlines. For more information, see Instructions for Form 1040X (IRS site).

How do I amend an amended tax return?
Simply follow the same amend procedure that you used the first time.

When you mail your amended Form 1040X, be sure to attach a copy of your original Form 1040X.

If I’m due a refund, how and when will I receive it?
You can either apply a federal refund towards next year’s taxes or receive a check, which will be mailed to the address on your amended return.

Refunds from amended federal returns can take 8 – 12 weeks to be processed. If you haven’t received your refund after 8 weeks, call the IRS at (800) 829-1040.

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