1099C and IRS Form 982, can anyone help me?

[oregonpilot]

hi im...turbo tax did not put anything in part II.
not even any zeros.

[imran93]

I am in a similar situation. I got 1099-C for business credit cards that were dischared in Chapter 7 that I was personally liable for.

I cannot understand Part II of Form 982. Please advise did you fill up anything in Part II or put values of zero everywhere

Thanks

[oregonpilot]

Cap 1 tells IRS i have 4300. in 1099c and 982 tells IRS 4300. is excluded from income so ...
more LOL

One hand giveth and another hand taketh away!! hehe

[panda]

Heck, I never would have even known about this form or anything else that mattered if not for this forum. Makes me wonder what people do that are not accessing the knowledge here. I would be trying to figure out all of this stuff after I had thought everything was done with my bankruptcy, as I knew that was supposed to take care of everything, but my attorney sure never mentioned anything about these little extra things that show up later. I probably would be collapsing from anxiety attacks with the 1099's showing up, as mine, if I get any, will be turning up next year.

[SunshineGal]

Right?? How stupid is it that the IRS has such complicated tax laws that you need an advanced accounting degree to fill out a form that doesn't even effect your adjusted gross income?

[oregonpilot]

Right ON panda
My thoughts exactly.

It isn't going to affect any extra taxes to be paid so they can tell me where to go (with more info)...so to speak!!

[panda]

Thanks for the updates, this does help with some clarifications, and I am also thinking as long as I have included everything on my forms, if I get audited, then they can tell me at that time how it should have been done correctly, but from my understanding things should be ok, I mean my goodness, we are all bankrupt, so what do they expect us to do, go and pay money we don't have for more advise?

[oregonpilot]

Hi sunshine.....sounds like a good plan to me. The way i looked at it....turboTax De knows more than i do so i trusted how they handled it.
I figured the worst that could happen would be the IRS tells me "Bad gramma" LOL
Cap 1 tells IRS i have 4300. in 1099c and 982 tells IRS 4300. is excluded from income so ...how can i argue with that.
more LOL

[SunshineGal]

Hi,

Thought I would post an update. Due to all the craziness in DC, I figured it was worth using H&R block to efile, the other benefit is they will offer advice if the IRS audits the return...not sure how much it's worth, but I figured if the 982 is questioned I'll at least get some help from them since it was their program that walked me through it.

As Oregon stated, line 10a was left blank. I'm not certain it's right, but since H&R did it that way and it's what my accountant told me, than I figure who am I to argue?

Thanks for all the help.

SG

[SunshineGal]

Hi Panda,

It's not just the phonecall, it's also the instructions! According to the lady at the IRS I'm supposed to include all personal property including clothing, jewelry, etc. Take a look at some of the detailed examples!

http://www.irs.gov/publications/p4681/ch04.html

Now, if you go into section 908 which deals with bankruptcy, it tells you NOT to reduce the basis of your *exempt property*, and of course all the 982 examples offer situations other than a no asset chapter 7.

"Exempt property under title 11. If debt is canceled in a bankruptcy case under title 11 of the United States Code, do not reduce the basis in property that the debtor treats as exempt property under section 522 of title 11. "

http://www.irs.gov/publications/p908/ar02.html#en_US_publink1000137327

I'm reasonably confident that his cost basis will fall below the amount of liabilities after the discharge, so I'm thinking I'll put $0 and be done with it based off the following in the instructions for 908.

"The reduction in basis for canceled debt in bankruptcy or in insolvency cannot be more than the total basis of property held immediately after the debt cancellation, minus the total liabilities immediately after the cancellation"

I've spent days trying to figure this out, and even my accountant had to research it and call me back. Think the form may be a little too complicated? (lol)

[panda]

I was confused also by your first post, as I had been reading up on this and had come to the conclusion that nothing went into the other sections after filling out 1a and 2. I am glad that was confirmed. Let me just hazard to guess, the conflicting info probably came from the call in to the IRS, they are notorious for wrong information.

[SunshineGal]

Hi Oregon,

Thank you! I sent a pm with a question, but I had missed the part in your post where nothing was filled out in parts one or two! Turns out I'm going to listen to the accountant afterall, lol.

SG

[oregonpilot]

Hi Oregon...it was a business credit card that he was personally liable for. The business was closed in 08, and the final taxes were filed in 09.

The one 1099c i got was for C1 business card i was personally liable for.
I use TurboTax and in the interview part i put in the info about the bk and it fills in the forms. So on my Form982 all it filled in was 1a "x" and line 2 had the amt. There was nothing else entered on the form in part II or part III

It had been mind boggling trying to figure out what need to be entered.
Then TT updated the form 982 and it was ALL better!!

[daylate]

Basis is what you paid for it, not its FMV. The difference between the two is your gain (FMV>basis) or loss (basis>FMV).

[SunshineGal]

Hi Oregon...it was a business credit card that he was personally liable for. The business was closed in 08, and the final taxes were filed in 09.