DEBIT CANCELLATION

[jim_wakem]

I have a client that has debit cancellation of a home in 2019. I know there are new rules for the 2019 tax year on this but can't find anything  need some help here.

[Just-Lisa-Now-]

This is from Nolo  if you search canceled mortgage debt rather then debit, you might have better luck.

https://www.nolo.com/legal-updates/mortgage-forgiveness-tax-break-extended-through-2020.html

[Terry53029]

from IRS: read full text here. https://www.irs.gov/taxtopics/tc431

 Generally, if you exclude canceled debt from income under one of the exclusions listed above, you must reduce certain tax attributes (certain credits and carryovers, losses and carryovers, basis of assets, etc.) (but not below zero) by the amount excluded. You must attach to your tax return a Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjus... to report the amount qualifying for exclusion and any corresponding reduction of those tax attributes. For cancellation of qualified principal residence indebtedness that you exclude from income, you must only reduce your basis in your principal residence.

[jim_wakem]

Your info was good and thanks,  there is or was a form where you could list all your assets and liabilities to figure the amount you were upside down, do they still have such a thing and if so what is the form ? I thought it was the 982 but that isn't the one I was looking for

[Terry53029]

Work sheet is in Pro Series Pro if that is what you are using, click on where do I find, and type "canceled debt worksheet"

[jim_wakem]

ok now not to be a smarty because I am still a little green at this where do I find the where do I find in pro series pro 

[Terry53029]

When you have a client open, on the menu on top a small green box with a ? mark

[Just-Lisa-Now- · Accepted solution]

Use this button on the toolbar when you need to find a certain form or worksheet, saves tons of time!

[jim_wakem]

THANK YOU 

[jim_wakem]

thanks it was the ticket