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Free E File And Free State Tax Filing

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Free E File And Free State Tax Filing

Free e file and free state tax filing There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail. Free e file and free state tax filing Free e file and free state tax filing If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes when filing Form 4868 electronically, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. Several companies offer free filing of Form 4868 through the Free File program that you can access on the IRS.gov website. If you wish to file electronically, be sure to have a copy of last year's tax return. You will be asked to provide the adjusted gross income (AGI) from the return for taxpayer verification. Free e file and free state tax filing Free e file and free state tax filing A second way of requesting an automatic extension of time to file your individual income tax return is to pay part or your entire estimated income tax due by credit card or debit card or by using EFTPS. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records. Free e file and free state tax filing Free e file and free state tax filing Finally, you can request an automatic extension of time to file your individual income tax return by completing paper Form 4868 and mailing it to the appropriate address provided on the form. Free e file and free state tax filing Free e file and free state tax filing Please be aware that an extension of time to file is NOT an extension of time to pay.
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The Free E File And Free State Tax Filing

Free e file and free state tax filing 4. Free e file and free state tax filing   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. Free e file and free state tax filing However, the information shown on the filled-in forms is not from any actual person or scenario. Free e file and free state tax filing Example 1—Mortgage loan modification. Free e file and free state tax filing    In 2007, Nancy Oak bought a main home for $435,000. Free e file and free state tax filing Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. Free e file and free state tax filing The loan was secured by the home. Free e file and free state tax filing The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. Free e file and free state tax filing In 2008, Nancy took out a second mortgage loan (also a recourse debt) in the amount of $30,000 that was used to substantially improve her kitchen. Free e file and free state tax filing    In 2011, when the outstanding principal of the first and second mortgage loans was $440,000, Nancy refinanced the two recourse loans into one recourse loan in the amount of $475,000. Free e file and free state tax filing The FMV of Nancy's home at the time of the refinancing was $500,000. Free e file and free state tax filing Nancy used the additional $35,000 debt ($475,000 new mortgage loan minus $440,000 outstanding principal of Nancy's first and second mortgage loans immediately before the refinancing) to pay off personal credit cards and to pay college tuition for her son. Free e file and free state tax filing After the refinancing, Nancy has qualified principal residence indebtedness in the amount of $440,000 because the refinanced debt is qualified principal residence indebtedness only to the extent the amount of debt is not more than the old mortgage principal just before the refinancing. Free e file and free state tax filing   In 2013, Nancy was unable to make her mortgage loan payments. Free e file and free state tax filing On August 31, 2013, when the outstanding balance of her refinanced mortgage loan was still $475,000 and the FMV of the property was $425,000, Nancy's bank agreed to a loan modification (a “workout”) that resulted in a $40,000 reduction in the principal balance of her loan. Free e file and free state tax filing Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. Free e file and free state tax filing   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. Free e file and free state tax filing Identifiable event code "F" appears in box 6. Free e file and free state tax filing This box shows the reason the creditor has filed Form 1099-C. Free e file and free state tax filing To determine if she must include the canceled debt in her income, Nancy must determine whether she meets any of the exceptions or exclusions that apply to canceled debts. Free e file and free state tax filing Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. Free e file and free state tax filing   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. Free e file and free state tax filing Although Nancy has $440,000 of qualified principal residence indebtedness, part of her loan ($35,000) was not qualified principal residence indebtedness because it was used to pay off personal credit cards and college tuition for her son. Free e file and free state tax filing Applying the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent the amount canceled is more than the amount of the debt (immediately before the cancellation) that is not qualified principal residence indebtedness. Free e file and free state tax filing Thus, Nancy can exclude only $5,000 of the canceled debt as qualified principal residence indebtedness ($40,000 amount canceled minus $35,000 nonqualified debt). Free e file and free state tax filing   Because Nancy does not meet any other exception or exclusion, she checks only the box on line 1e of Form 982 and enters $5,000 on line 2. Free e file and free state tax filing Nancy must also enter $5,000 on line 10b and reduce the basis of her main home by the $5,000 she excluded from income, bringing the adjusted basis in her home to $460,000 ($435,000 purchase price plus $30,000 substantial improvement minus $5,000). Free e file and free state tax filing Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. Free e file and free state tax filing You can see Nancy's Form 1099-C and a portion of her Form 1040 below. Free e file and free state tax filing Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 1040, U. Free e file and free state tax filing S. Free e file and free state tax filing Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. Free e file and free state tax filing    In 2005, John and Mary Elm bought a main home for $335,000. Free e file and free state tax filing John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. Free e file and free state tax filing The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. Free e file and free state tax filing   John and Mary became unable to make their mortgage loan payments and on March 1, 2013, when the outstanding balance of the mortgage loan was $315,000 and the FMV of the property was $290,000, the bank foreclosed on the property and simultaneously canceled the remaining mortgage debt. Free e file and free state tax filing Immediately before the foreclosure, John and Mary's only other assets and liabilities were a checking account with a balance of $6,000, retirement savings of $13,000, and credit card debt of $5,500. Free e file and free state tax filing   John and Mary received a 2013 Form 1099-C showing canceled debt of $25,000 in box 2 ($315,000 outstanding balance minus $290,000 FMV) and an FMV of $290,000 in box 7. Free e file and free state tax filing Identifiable event code "D" appears in box 6. Free e file and free state tax filing This box shows the reason the creditor has filed Form 1099-C. Free e file and free state tax filing In order to determine if John and Mary must include the canceled debt in income, they must first determine whether they meet any of the exceptions or exclusions that apply to canceled debts. Free e file and free state tax filing In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. Free e file and free state tax filing Their sample Form 1099-C is shown on this page. Free e file and free state tax filing   John and Mary complete the insolvency worksheet and determine that they were insolvent immediately before the cancellation because at that time their liabilities exceeded the FMV of their assets by $11,500 ($320,500 total liabilities minus $309,000 FMV of total assets). Free e file and free state tax filing However, because the entire debt canceled is qualified principal residence indebtedness, the insolvency exclusion only applies if John and Mary elect to apply the insolvency exclusion instead of the qualified principal residence exclusion. Free e file and free state tax filing   John and Mary do not elect to apply the insolvency exclusion instead of the qualified principal residence exclusion because under the insolvency exclusion their exclusion would be limited to the amount by which they were insolvent ($11,500). Free e file and free state tax filing Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. Free e file and free state tax filing Under the qualified principal residence exclusion, the amount that John and Mary can exclude is not limited because their qualified principal residence indebtedness is not more than $2 million and no portion of the loan was nonqualified debt. Free e file and free state tax filing As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. Free e file and free state tax filing Because John and Mary no longer own the home due to the foreclosure, John and Mary have no remaining basis in the home at the time of the debt cancellation. Free e file and free state tax filing Thus, John and Mary leave line 10b of Form 982 blank. Free e file and free state tax filing   John and Mary must also determine whether they have a gain or loss from the foreclosure. Free e file and free state tax filing John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. Free e file and free state tax filing Because this loss relates to their home, it is a nondeductible loss. Free e file and free state tax filing   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. Free e file and free state tax filing John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 1099-C, Cancellation of Debt Table 1-1. Free e file and free state tax filing Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. Free e file and free state tax filing Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Free e file and free state tax filing Otherwise, go to Part 2. Free e file and free state tax filing 1. Free e file and free state tax filing Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $315,000. Free e file and free state tax filing 00 2. Free e file and free state tax filing Enter the fair market value of the transferred property $290,000. Free e file and free state tax filing 00 3. Free e file and free state tax filing Ordinary income from the cancellation of debt upon foreclosure or repossession. Free e file and free state tax filing * Subtract line 2 from line 1. Free e file and free state tax filing If less than zero, enter zero. Free e file and free state tax filing Next, go to Part 2 $ 25,000. Free e file and free state tax filing 00 Part 2. Free e file and free state tax filing Gain or loss from foreclosure or repossession. Free e file and free state tax filing   4. Free e file and free state tax filing Enter the smaller of line 1 or line 2. Free e file and free state tax filing If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property $290,000. Free e file and free state tax filing 00 5. Free e file and free state tax filing Enter any proceeds you received from the foreclosure sale   6. Free e file and free state tax filing Add line 4 and line 5 $290,000. Free e file and free state tax filing 00 7. Free e file and free state tax filing Enter the adjusted basis of the transferred property $335,000. Free e file and free state tax filing 00 8. Free e file and free state tax filing Gain or loss from foreclosure or repossession. Free e file and free state tax filing Subtract line 7 from line 6 ($ 45,000. Free e file and free state tax filing 00) * The income may not be taxable. Free e file and free state tax filing See chapter 1 for more details. Free e file and free state tax filing Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. Free e file and free state tax filing Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Free e file and free state tax filing Credit card debt $ 5,500 2. Free e file and free state tax filing Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 315,000 3. Free e file and free state tax filing Car and other vehicle loans $ 4. Free e file and free state tax filing Medical bills owed $ 5. Free e file and free state tax filing Student loans $ 6. Free e file and free state tax filing Accrued or past-due mortgage interest $ 7. Free e file and free state tax filing Accrued or past-due real estate taxes $ 8. Free e file and free state tax filing Accrued or past-due utilities (water, gas, electric) $ 9. Free e file and free state tax filing Accrued or past-due child care costs $ 10. Free e file and free state tax filing Federal or state income taxes remaining due (for prior tax years) $ 11. Free e file and free state tax filing Judgments $ 12. Free e file and free state tax filing Business debts (including those owed as a sole proprietor or partner) $ 13. Free e file and free state tax filing Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Free e file and free state tax filing Other liabilities (debts) not included above $ 15. Free e file and free state tax filing Total liabilities immediately before the cancellation. Free e file and free state tax filing Add lines 1 through 14. Free e file and free state tax filing $ 320,500 Part II. Free e file and free state tax filing Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Free e file and free state tax filing Cash and bank account balances $ 6,000 17. Free e file and free state tax filing Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 290,000 18. Free e file and free state tax filing Cars and other vehicles $ 19. Free e file and free state tax filing Computers $ 20. Free e file and free state tax filing Household goods and furnishings (for example, appliances, electronics, furniture, etc. Free e file and free state tax filing ) $ 21. Free e file and free state tax filing Tools $ 22. Free e file and free state tax filing Jewelry $ 23. Free e file and free state tax filing Clothing $ 24. Free e file and free state tax filing Books $ 25. Free e file and free state tax filing Stocks and bonds $ 26. Free e file and free state tax filing Investments in coins, stamps, paintings, or other collectibles $ 27. Free e file and free state tax filing Firearms, sports, photographic, and other hobby equipment $ 28. Free e file and free state tax filing Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. Free e file and free state tax filing Interest in a pension plan $ 30. Free e file and free state tax filing Interest in education accounts $ 31. Free e file and free state tax filing Cash value of life insurance $ 32. Free e file and free state tax filing Security deposits with landlords, utilities, and others $ 33. Free e file and free state tax filing Interests in partnerships $ 34. Free e file and free state tax filing Value of investment in a business $ 35. Free e file and free state tax filing Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Free e file and free state tax filing Other assets not included above $ 37. Free e file and free state tax filing FMV of total assets immediately before the cancellation. Free e file and free state tax filing Add lines 16 through 36. Free e file and free state tax filing $ 309,000 Part III. Free e file and free state tax filing Insolvency 38. Free e file and free state tax filing Amount of Insolvency. Free e file and free state tax filing Subtract line 37 from line 15. Free e file and free state tax filing If zero or less, you are not insolvent. Free e file and free state tax filing $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)          Example 3—Mortgage loan foreclosure with debt exceeding $2 million limit. Free e file and free state tax filing    In 2011, Kathy and Frank Willow got married and entered into a contract with Hive Construction Corporation to build a house for $3,000,000 to be used as their main home. Free e file and free state tax filing Kathy and Frank made a $400,000 down payment and took out a $2,600,000 mortgage to finance the remaining cost of the house. Free e file and free state tax filing Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. Free e file and free state tax filing   In November 2013, when the outstanding principal balance on the mortgage loan was $2,500,000, the FMV of the property fell to $1,750,000 and Kathy and Frank abandoned the property by permanently moving out. Free e file and free state tax filing The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. Free e file and free state tax filing On December 26, 2013, the lender canceled the remaining debt. Free e file and free state tax filing Kathy and Frank have no tax attributes other than basis of personal-use property. Free e file and free state tax filing   The lender issued a 2013 Form 1099-C to Kathy and Frank showing canceled debt of $750,000 in box 2 (the remaining balance on the $2,500,000 mortgage debt after application of the foreclosure sale proceeds) and $1,750,000 in box 7 (FMV of the property). Free e file and free state tax filing Identifiable event code "D" appears in box 6. Free e file and free state tax filing This box shows the reason the creditor has filed Form 1099-C. Free e file and free state tax filing Although Kathy and Frank abandoned the property, the lender did not need to also file a Form 1099-A because the lender canceled the debt in connection with the foreclosure in the same calendar year. Free e file and free state tax filing Kathy and Frank are filing a joint return for 2013. Free e file and free state tax filing   Because the foreclosure occurred prior to the debt cancellation, Kathy and Frank first calculate their gain or loss from the foreclosure using Table 1-1. Free e file and free state tax filing Because Kathy and Frank remained personally liable for the $750,000 debt remaining after the foreclosure ($2,500,000 outstanding debt immediately before the foreclosure minus $1,750,000 satisfied through the sale of the home), Kathy and Frank enter $1,750,000 on line 1 of Table 1-1 ($2,500,000 outstanding debt immediately before the foreclosure minus the $750,000 for which they remained liable). Free e file and free state tax filing Completing Table 1-1, Kathy and Frank find that they have no ordinary income from the cancellation of debt upon foreclosure and that they have a $1,250,000 loss. Free e file and free state tax filing Because this loss relates to their home, it is a nondeductible loss. Free e file and free state tax filing   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. Free e file and free state tax filing Immediately before the cancellation, Kathy and Frank had $15,000 in a savings account, household furnishings with an FMV of $17,000, a car with an FMV of $10,000, and $18,000 in credit card debt. Free e file and free state tax filing Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. Free e file and free state tax filing The household furnishings originally cost $30,000. Free e file and free state tax filing The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. Free e file and free state tax filing Kathy and Frank had no adjustments to the cost basis of the car. Free e file and free state tax filing Kathy and Frank had no other assets or liabilities at the time of the cancellation. Free e file and free state tax filing Kathy and Frank complete the insolvency worksheet to calculate that they were insolvent to the extent of $726,000 immediately before the cancellation ($768,000 of total liabilities minus $42,000 FMV of total assets). Free e file and free state tax filing   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. Free e file and free state tax filing Kathy and Frank also owned the same car at that time (still with an FMV of $10,000 and basis of $16,000) and the same household furnishings (still with an FMV of $17,000 and a basis of $30,000). Free e file and free state tax filing Kathy and Frank had no other assets or liabilities at that time. Free e file and free state tax filing Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. Free e file and free state tax filing   Because the canceled debt is qualified principal residence indebtedness, the insolvency exclusion does not apply unless Kathy and Frank elect to apply the insolvency exclusion instead of the qualified principal residence indebtedness exclusion. Free e file and free state tax filing The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. Free e file and free state tax filing The remaining $500,000 ($2,500,000 outstanding mortgage loan minus $2,000,000 limit on qualified principal residence indebtedness) is not qualified principal residence indebtedness. Free e file and free state tax filing Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. Free e file and free state tax filing Under the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent that the amount canceled ($750,000) exceeds the amount of the loan (immediately before the cancellation) that is not qualified principal residence indebtedness ($500,000). Free e file and free state tax filing This means that Kathy and Frank can only exclude $250,000 ($750,000 amount canceled minus $500,000 nonqualified debt) under the qualified principal residence indebtedness exclusion. Free e file and free state tax filing   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. Free e file and free state tax filing Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. Free e file and free state tax filing Kathy and Frank can exclude the remaining $500,000 canceled debt under the insolvency exclusion because they were insolvent immediately before the cancellation to the extent of $726,000. Free e file and free state tax filing Thus, Kathy and Frank check the boxes on lines 1b and 1e of Form 982 and enter $750,000 on line 2 ($250,000 excluded under the qualified principal residence indebtedness exclusion plus $500,000 excluded under the insolvency exclusion). Free e file and free state tax filing   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. Free e file and free state tax filing Because Kathy and Frank no longer own the home due to the foreclosure, Kathy and Frank have no remaining basis in the home at the time of the debt cancellation. Free e file and free state tax filing Thus, Kathy and Frank leave line 10b of Form 982 blank. Free e file and free state tax filing However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. Free e file and free state tax filing As a result, Kathy and Frank must reduce the basis of property they own based on the amount of canceled debt they are excluding from income under the insolvency rules. Free e file and free state tax filing Because Kathy and Frank have no tax attributes other than basis of personal-use property to reduce, Kathy and Frank figure the amount they must include on line 10a of Form 982 by taking the smallest of: The $46,000 bases of their personal-use property held at the beginning of 2014 ($16,000 basis in the car plus $30,000 basis in household furnishings), The $500,000 of the nonbusiness debt (other than qualified principal residence indebtedness) that they are excluding from income on line 2 of Form 982, or The $43,000 excess of the total bases of the property and the amount of money they held immediately after the cancellation over their total liabilities immediately after the cancellation ($15,000 in savings account plus $30,000 basis in household furnishings plus $16,000 adjusted basis in car minus $18,000 credit card debt). Free e file and free state tax filing Kathy and Frank enter $43,000 on Form 982, line 10a and reduce their bases in the car and the household furnishings in proportion to the total adjusted bases in all their property. Free e file and free state tax filing Kathy and Frank reduce the basis in the car by $14,956. Free e file and free state tax filing 52 ($43,000 x $16,000/$46,000). Free e file and free state tax filing And they reduce the basis in the household furnishings by $28,043. Free e file and free state tax filing 48 ($43,000 x $30,000/$46,000). Free e file and free state tax filing   Following are Kathy and Frank's sample forms and worksheets. Free e file and free state tax filing Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 1099-C, Cancellation of Debt Table 1-1. Free e file and free state tax filing Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. Free e file and free state tax filing Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Free e file and free state tax filing Otherwise, go to Part 2. Free e file and free state tax filing 1. Free e file and free state tax filing Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $1,750,000. Free e file and free state tax filing 00 2. Free e file and free state tax filing Enter the fair market value of the transferred property $1,750,000. Free e file and free state tax filing 00 3. Free e file and free state tax filing Ordinary income from the cancellation of debt upon foreclosure or repossession. Free e file and free state tax filing * Subtract line 2 from line 1. Free e file and free state tax filing If less than zero, enter zero. Free e file and free state tax filing Next, go to Part 2 $0. Free e file and free state tax filing 00 Part 2. Free e file and free state tax filing Gain or loss from foreclosure or repossession. Free e file and free state tax filing   4. Free e file and free state tax filing Enter the smaller of line 1 or line 2. Free e file and free state tax filing If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property. Free e file and free state tax filing $1,750,000. Free e file and free state tax filing 00 5. Free e file and free state tax filing Enter any proceeds you received from the foreclosure sale   6. Free e file and free state tax filing Add line 4 and line 5 $1,750,000. Free e file and free state tax filing 00 7. Free e file and free state tax filing Enter the adjusted basis of the transferred property $3,000,000. Free e file and free state tax filing 00 8. Free e file and free state tax filing Gain or loss from foreclosure or repossession. Free e file and free state tax filing Subtract line 7 from line 6 ($1,250,000. Free e file and free state tax filing 00) * The income may not be taxable. Free e file and free state tax filing See chapter 1 for more details. Free e file and free state tax filing    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. Free e file and free state tax filing Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Free e file and free state tax filing Credit card debt $ 18,000 2. Free e file and free state tax filing Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 750,000 3. Free e file and free state tax filing Car and other vehicle loans $ 4. Free e file and free state tax filing Medical bills owed $ 5. Free e file and free state tax filing Student loans $ 6. Free e file and free state tax filing Accrued or past-due mortgage interest $ 7. Free e file and free state tax filing Accrued or past-due real estate taxes $ 8. Free e file and free state tax filing Accrued or past-due utilities (water, gas, electric) $ 9. Free e file and free state tax filing Accrued or past-due child care costs $ 10. Free e file and free state tax filing Federal or state income taxes remaining due (for prior tax years) $ 11. Free e file and free state tax filing Judgments $ 12. Free e file and free state tax filing Business debts (including those owed as a sole proprietor or partner) $ 13. Free e file and free state tax filing Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Free e file and free state tax filing Other liabilities (debts) not included above $ 15. Free e file and free state tax filing Total liabilities immediately before the cancellation. Free e file and free state tax filing Add lines 1 through 14. Free e file and free state tax filing $ 768,000 Part II. Free e file and free state tax filing Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Free e file and free state tax filing Cash and bank account balances $ 15,000 17. Free e file and free state tax filing Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 18. Free e file and free state tax filing Cars and other vehicles $ 10,000 19. Free e file and free state tax filing Computers $ 20. Free e file and free state tax filing Household goods and furnishings (for example, appliances, electronics, furniture, etc. Free e file and free state tax filing ) $ 17,000 21. Free e file and free state tax filing Tools $ 22. Free e file and free state tax filing Jewelry $ 23. Free e file and free state tax filing Clothing $ 24. Free e file and free state tax filing Books $ 25. Free e file and free state tax filing Stocks and bonds $ 26. Free e file and free state tax filing Investments in coins, stamps, paintings, or other collectibles $ 27. Free e file and free state tax filing Firearms, sports, photographic, and other hobby equipment $ 28. Free e file and free state tax filing Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. Free e file and free state tax filing Interest in a pension plan $ 30. Free e file and free state tax filing Interest in education accounts $ 31. Free e file and free state tax filing Cash value of life insurance $ 32. Free e file and free state tax filing Security deposits with landlords, utilities, and others $ 33. Free e file and free state tax filing Interests in partnerships $ 34. Free e file and free state tax filing Value of investment in a business $ 35. Free e file and free state tax filing Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Free e file and free state tax filing Other assets not included above $ 37. Free e file and free state tax filing FMV of total assets immediately before the cancellation. Free e file and free state tax filing Add lines 16 through 36. Free e file and free state tax filing $ 42,000 Part III. Free e file and free state tax filing Insolvency 38. Free e file and free state tax filing Amount of Insolvency. Free e file and free state tax filing Subtract line 37 from line 15. Free e file and free state tax filing If zero or less, you are not insolvent. Free e file and free state tax filing $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. Free e file and free state tax filing Please click the link to view the image. Free e file and free state tax filing Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications