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Debt Relief – Insolvency – Bankruptcy Information » Entries tagged with "attributes."

IRS form 982 line 10a “basis” Reduction & Attributes Due to Discharge of Indebtedness?

Example: 4 personal credit card loans settled within weeks of each other with a total forgiveness of approx $45K. Insolvent (total assets less total liabilities) by $ 82K (negative) 1 day before and still insolvent by no less than $52K (negative) after any of the forgiven debts. Checked box 1b and entered $45K on line 2. What do you need to calculate for line 10a in Part 2 since the degree of insolvency is still greater than the forgiven debt before and after? What is done with the value for line 10a? Is it advantageous to have a larger value or smaller value on line 10a in relation to the amount of forgiven debt? … Read entire article »

Filed under: Insolvency

Tax question about Form 982 – Reduction of Tax Attributes Due to Discharge of Indebtedness?

Could someone please explain line 10a? Line 10a. In the case of a title 11 case or insolvency (except when an election under section 108(b)(5) is made), the reduction in basis is limited to the aggregate of the basis of your property immediately after the discharge over the aggregate of your liabilities immediately after the discharge. (what does all that goop mean?) Also, what does it mean below by (other than qualified principal residence indebtedness) ? A nonbusiness debt (other than qualified principal residence indebtedness, such as a car loan or credit card debt) I had a Credit card cancel debt and two mortgages, one mortgage was a second mortgage on my main house, the other was a second mortgage on a rental. Any help with filling out this form is appreciated. … Read entire article »

Filed under: Insolvency

Re Form 982 Insolvent cx mortgage debt (paid credit cards) and reduction of attributes.?

The cx debt was $16,620.. The insolvent worksheet shows fmv assets $69,004. Liabilities $117,936. Insolvent amount $48,932. I have read the publications regarding this, but need help with the attribute reduction part. I think it’s zero but some said it can’t be zero. Then I got confused. The original cost basis of assets was $92,288, Liabilities after cx is $101,316. But the fmv used to determine insolvency now is $69,004. Can you help me out on how to figure the attribute reduction. … Read entire article »

Filed under: Insolvency

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