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Screen 982 - Reduction of Tax Attributes - Discharge of Indebtedness (1040)
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Overview
Use this screen to enter information to complete Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).
General Information
Use Part 1 of Form 982 to indicate why any amount received from the discharge of indebtedness should be excluded from gross income and the amount excluded.
Amount excluded is due to: Discharge...
Enter
X
in the Discharge...
fields that identify the reasons for which gross income is excluded.note
You may enter
X
in more than one field if necessary.Total amount of discharged indebtedness excluded from gross income (Force)
UltraTax CS calculates the total based on the sum of the 1099C amounts excluded from income with exclusion codes. The total transfers to Form 982, line 2. UltraTax CS uses an amount in this field instead of a calculated amount.
Treat all section 1221(a)(1) real property as depreciable property
Use this field to elect to treat all real property described in section 1221(a)(1), relating to property held for sale to customers in the ordinary course of trade or business, as if it were depreciable property.
Reduction of Tax Attributes
Display available credits and carryovers
Enter
X
to have UltraTax CS display the available credit and carryover attributes for reduction. UltraTax CS shows the amounts as of the last time the return was printed or previewed. If data is changed within the return after the attributes have been displayed initially, remove the X
from this field and preview the return. Enter X
again and UltraTax CS updates the available attributes.note
On Form 982, unless line 1c (qualified farm indebtedness), line 1d (qualified real property business indebtedness), or line 5 (election to reduce the basis of depreciable property first) are marked, the available attributes will need to be reduced in the following order.
- any net operating loss for the current tax year of the discharge and any net operating loss carryover to that year
- any general business credit carryover to or from the tax year if discharge
- any minimum tax credit as of the beginning of the tax year immediately after the tax year of discharge
- any net capital loss for the tax year of the discharge and any capital loss carryover to that tax year
- any passive activity loss and credit carryovers from the tax year of the discharge
- any foreign tax credit carryover to or from the tax year of discharge
Net operating loss and carryover
Reduce the net operating loss or carryover by one dollar for each dollar of excluded canceled debt. UltraTax CS reduces the net operating loss carryover into the next tax year by the amount in the field.
Reduction of the net operating loss or carryover to the current year is done
after
taking into account any amount used to reduce the current year taxable income. Form 982 reduces remaining current year NOL attributes after the tax liability for the current year has been calculated, then reduces remaining prior year NOL.General business credit carryover
Enter an amount to reduce the credit by 33 1/3 cents for each dollar (33 1/3%) of excluded canceled debt. Enter the amount of excluded debt. UltraTax CS calculates the reduction and reports the amount on Form 982, line 7.
Minimum tax credit
Enter an amount field to reduce the minimum tax credit by 33 1/3 cents for each dollar (33 1/3%) of excluded canceled debt. Enter the amount of excluded debt. TUltraTax CS calculates the reduction and reports the amount on Form 982, line 8.
Net capital loss and capital loss carryover
Enter an amount to reduce the short-term and long-term capital loss or carryover by one dollar for each dollar of excluded canceled debt.
Basis of nondepreciable... / Reduce basis of principal residence / Qualified farm indebtedness...
Enter amounts in these fields to reduce the basis by one dollar for each dollar of excluded canceled debt.
note
Generally, when reducing the tax attributes for canceled qualified farm indebtedness excluded from income, the taxpayer will need to follow the ordering rules for reduction of tax attributes. Reduce the basis of qualified property. Qualified property is any property the taxpayer uses or holds for use in the trade or business or for the production of income. Reduce the basis of qualified property in the following order.
- Depreciable qualified property. The payer can elect on Form 982 to treat real property held primarily for sale to customers as if it were depreciable property.
- Land that's qualified property and is used or held for use in the farming business.
- Other qualified property.
Passive activity loss and credit carryover
Enter an amount to reduce the passive activity loss by one dollar for each dollar of excluded income. Reduce the passive activity credit carryover by 33 1/3 cents for each dollar (33 1/3%) of excluded canceled debt. Enter the amount of excluded debt, UltraTax CS calculates the amount to report on Form 982, line 12.
note
Passive activity losses and passive activity credit carryovers will need to be reduced on a per activity basis. UltraTax CS doesn't reduce these attributes. You may reduce passive activity losses and passive activity credit carryovers by overriding amounts on the Passive Activity Deduction Worksheet, Passive Activity Credit Worksheet, and Passive Activity Deduction Worksheet-PTP, located in the 8582Wrk folder.
Foreign tax credit carryover
Enter an amount to reduce the foreign tax credit carryover by 33 1/3 cents for each dollar (33 1/3%) of excluded canceled debt. Enter the amount of excluded debt, UltraTax CS calculates the reduction and reports the amount on Form 982, line 13.
note
UltraTax CS doesn't automatically reduce the foreign tax credit carryover attributes. You may reduce the foreign tax credit carryovers by overriding amounts on the Foreign Tax Credit Carryover Report, located in the 1116Wrk folder.