Discussion Archives:Form 982 Qualified real property

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Discussion Forum Index --> Advanced Tax Questions --> Form 982 Qualified real property


Discussion Forum Index --> Tax Questions --> Form 982 Qualified real property

Dlhome (talk|edits) said:

24 February 2010
This the first time I have used this form. It is most confusing. The client allowed a rental property to be taken back after 5 years. The debt cancellation on 1099c is greater than the FMV. The adjusted basis less debt cancellation is less than the FMV. If I understand, the number that is entered on form 982 line 4 it is adjusted basis less COD. Is that correct? If so is the difference between line 2 and 4 reported on line 21, and schudule D will reflect a gain. ???

R2 (talk|edits) said:

25 February 2010
No. Line 4 is used if you are making a Qualified Real Property Business Indebtedness Election. If this is a solvent taxpayer and you are making that election, then the amount on line 4 is the difference between boxes 2 and 4 on the 1099-A.

The sales price to be reported on Form 4797 is the amount in box 4 of the 1099-A. The basis is the adjusted basis as reported on the latest depreciation schedule, minus the amount on line 4 of Form 982.

DaveFogel (talk|edits) said:

25 February 2010
R2, I think that the original post is referring to a Form 1099-C, not a 1099-A. In addition, I think more information is needed.

Was the debt recourse or nonrecourse? Can you give us some numbers to work with (amount of debt, FMV, adjusted basis)? Was the debt refinanced? If so, what were the refi proceeds used for? Was the client insolvent immediately before the debt was canceled?

Jeff-Ohio (talk|edits) said:

17 April 2011
duplicate question, already asked here: Discussion:Form 982 - with Interest.
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