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File 2009 Taxes For Free

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File 2009 Taxes For Free

File 2009 taxes for free It's easy, accurate and fast. So why would you file your taxes any other way? File 2009 taxes for free Old fashioned paper tax forms have been around for decades, but it might be time for them to go the way of the dodo. Who wants to wait for weeks to get their check in the mail when you can just efile your tax return electronically with the IRS and start enjoying your refund in as little as 7 days. File 2009 taxes for free If you consider the money the IRS holds on to while you wait for your refund as an interest free loan, then you’ll realize that you are losing money. No one other than the IRS can get an interest free loan and that doesn’t seem fair, does it? Enter the internet age. Commercial companies have been moving online for years now - when was the last time you've mailed a check or received a paper statement from your bank? Now, even the government sites are starting to get with the program and are offering quick and easy efile to everyone. Here are a few reasons why I switched to efile; maybe it’s time you do to!
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IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
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• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Dover  611 S. Dupont Hwy. 
Dover, DE 19901 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(302) 678-2784 
Georgetown  21309 Berlin Rd. Unit 13
Georgetown, DE 19947 

Monday-Friday - 8:30 a.m.- 4:30 
(Closed for lunch 12:30 p.m.- 1:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(301) 695-7615 
Wilmington  844 King St.
Wilmington, DE 19801 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(302) 573-6343 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If  face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 302-286-1654 in Wilmington or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
Silver Side Corp Ctr.
409 Silverside Rd
Wilmington DE 19809

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The File 2009 Taxes For Free

File 2009 taxes for free 4. File 2009 taxes for free   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. File 2009 taxes for free However, the information shown on the filled-in forms is not from any actual person or scenario. File 2009 taxes for free Example 1—Mortgage loan modification. File 2009 taxes for free    In 2007, Nancy Oak bought a main home for $435,000. File 2009 taxes for free Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. File 2009 taxes for free The loan was secured by the home. File 2009 taxes for free The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. File 2009 taxes for free 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. File 2009 taxes for free    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. File 2009 taxes for free The FMV of Nancy's home at the time of the refinancing was $500,000. File 2009 taxes for free 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. File 2009 taxes for free 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. File 2009 taxes for free   In 2013, Nancy was unable to make her mortgage loan payments. File 2009 taxes for free 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. File 2009 taxes for free Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. File 2009 taxes for free   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. File 2009 taxes for free Identifiable event code "F" appears in box 6. File 2009 taxes for free This box shows the reason the creditor has filed Form 1099-C. File 2009 taxes for free 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. File 2009 taxes for free Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. File 2009 taxes for free   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. File 2009 taxes for free 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. File 2009 taxes for free 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. File 2009 taxes for free 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). File 2009 taxes for free   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. File 2009 taxes for free 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). File 2009 taxes for free Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. File 2009 taxes for free You can see Nancy's Form 1099-C and a portion of her Form 1040 below. File 2009 taxes for free Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 1040, U. File 2009 taxes for free S. File 2009 taxes for free Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. File 2009 taxes for free    In 2005, John and Mary Elm bought a main home for $335,000. File 2009 taxes for free John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. File 2009 taxes for free The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. File 2009 taxes for free   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. File 2009 taxes for free 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. File 2009 taxes for free   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. File 2009 taxes for free Identifiable event code "D" appears in box 6. File 2009 taxes for free This box shows the reason the creditor has filed Form 1099-C. File 2009 taxes for free 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. File 2009 taxes for free In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. File 2009 taxes for free Their sample Form 1099-C is shown on this page. File 2009 taxes for free   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). File 2009 taxes for free 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. File 2009 taxes for free   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). File 2009 taxes for free Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. File 2009 taxes for free 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. File 2009 taxes for free As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. File 2009 taxes for free 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. File 2009 taxes for free Thus, John and Mary leave line 10b of Form 982 blank. File 2009 taxes for free   John and Mary must also determine whether they have a gain or loss from the foreclosure. File 2009 taxes for free John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. File 2009 taxes for free Because this loss relates to their home, it is a nondeductible loss. File 2009 taxes for free   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. File 2009 taxes for free John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 1099-C, Cancellation of Debt Table 1-1. File 2009 taxes for free Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. File 2009 taxes for free Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). File 2009 taxes for free Otherwise, go to Part 2. File 2009 taxes for free 1. File 2009 taxes for free 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. File 2009 taxes for free 00 2. File 2009 taxes for free Enter the fair market value of the transferred property $290,000. File 2009 taxes for free 00 3. File 2009 taxes for free Ordinary income from the cancellation of debt upon foreclosure or repossession. File 2009 taxes for free * Subtract line 2 from line 1. File 2009 taxes for free If less than zero, enter zero. File 2009 taxes for free Next, go to Part 2 $ 25,000. File 2009 taxes for free 00 Part 2. File 2009 taxes for free Gain or loss from foreclosure or repossession. File 2009 taxes for free   4. File 2009 taxes for free Enter the smaller of line 1 or line 2. File 2009 taxes for free 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. File 2009 taxes for free 00 5. File 2009 taxes for free Enter any proceeds you received from the foreclosure sale   6. File 2009 taxes for free Add line 4 and line 5 $290,000. File 2009 taxes for free 00 7. File 2009 taxes for free Enter the adjusted basis of the transferred property $335,000. File 2009 taxes for free 00 8. File 2009 taxes for free Gain or loss from foreclosure or repossession. File 2009 taxes for free Subtract line 7 from line 6 ($ 45,000. File 2009 taxes for free 00) * The income may not be taxable. File 2009 taxes for free See chapter 1 for more details. File 2009 taxes for free Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. File 2009 taxes for free 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. File 2009 taxes for free Credit card debt $ 5,500 2. File 2009 taxes for free 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. File 2009 taxes for free Car and other vehicle loans $ 4. File 2009 taxes for free Medical bills owed $ 5. File 2009 taxes for free Student loans $ 6. File 2009 taxes for free Accrued or past-due mortgage interest $ 7. File 2009 taxes for free Accrued or past-due real estate taxes $ 8. File 2009 taxes for free Accrued or past-due utilities (water, gas, electric) $ 9. File 2009 taxes for free Accrued or past-due child care costs $ 10. File 2009 taxes for free Federal or state income taxes remaining due (for prior tax years) $ 11. File 2009 taxes for free Judgments $ 12. File 2009 taxes for free Business debts (including those owed as a sole proprietor or partner) $ 13. File 2009 taxes for free Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. File 2009 taxes for free Other liabilities (debts) not included above $ 15. File 2009 taxes for free Total liabilities immediately before the cancellation. File 2009 taxes for free Add lines 1 through 14. File 2009 taxes for free $ 320,500 Part II. File 2009 taxes for free 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. File 2009 taxes for free Cash and bank account balances $ 6,000 17. File 2009 taxes for free 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. File 2009 taxes for free Cars and other vehicles $ 19. File 2009 taxes for free Computers $ 20. File 2009 taxes for free Household goods and furnishings (for example, appliances, electronics, furniture, etc. File 2009 taxes for free ) $ 21. File 2009 taxes for free Tools $ 22. File 2009 taxes for free Jewelry $ 23. File 2009 taxes for free Clothing $ 24. File 2009 taxes for free Books $ 25. File 2009 taxes for free Stocks and bonds $ 26. File 2009 taxes for free Investments in coins, stamps, paintings, or other collectibles $ 27. File 2009 taxes for free Firearms, sports, photographic, and other hobby equipment $ 28. File 2009 taxes for free Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. File 2009 taxes for free Interest in a pension plan $ 30. File 2009 taxes for free Interest in education accounts $ 31. File 2009 taxes for free Cash value of life insurance $ 32. File 2009 taxes for free Security deposits with landlords, utilities, and others $ 33. File 2009 taxes for free Interests in partnerships $ 34. File 2009 taxes for free Value of investment in a business $ 35. File 2009 taxes for free Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. File 2009 taxes for free Other assets not included above $ 37. File 2009 taxes for free FMV of total assets immediately before the cancellation. File 2009 taxes for free Add lines 16 through 36. File 2009 taxes for free $ 309,000 Part III. File 2009 taxes for free Insolvency 38. File 2009 taxes for free Amount of Insolvency. File 2009 taxes for free Subtract line 37 from line 15. File 2009 taxes for free If zero or less, you are not insolvent. File 2009 taxes for free $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free 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. File 2009 taxes for free    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. File 2009 taxes for free 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. File 2009 taxes for free Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. File 2009 taxes for free   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. File 2009 taxes for free The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. File 2009 taxes for free On December 26, 2013, the lender canceled the remaining debt. File 2009 taxes for free Kathy and Frank have no tax attributes other than basis of personal-use property. File 2009 taxes for free   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). File 2009 taxes for free Identifiable event code "D" appears in box 6. File 2009 taxes for free This box shows the reason the creditor has filed Form 1099-C. File 2009 taxes for free 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. File 2009 taxes for free Kathy and Frank are filing a joint return for 2013. File 2009 taxes for free   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. File 2009 taxes for free 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). File 2009 taxes for free 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. File 2009 taxes for free Because this loss relates to their home, it is a nondeductible loss. File 2009 taxes for free   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. File 2009 taxes for free 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. File 2009 taxes for free Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. File 2009 taxes for free The household furnishings originally cost $30,000. File 2009 taxes for free The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. File 2009 taxes for free Kathy and Frank had no adjustments to the cost basis of the car. File 2009 taxes for free Kathy and Frank had no other assets or liabilities at the time of the cancellation. File 2009 taxes for free 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). File 2009 taxes for free   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. File 2009 taxes for free 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). File 2009 taxes for free Kathy and Frank had no other assets or liabilities at that time. File 2009 taxes for free Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. File 2009 taxes for free   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. File 2009 taxes for free The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. File 2009 taxes for free 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. File 2009 taxes for free Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. File 2009 taxes for free 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). File 2009 taxes for free 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. File 2009 taxes for free   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. File 2009 taxes for free Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. File 2009 taxes for free 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. File 2009 taxes for free 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). File 2009 taxes for free   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. File 2009 taxes for free 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. File 2009 taxes for free Thus, Kathy and Frank leave line 10b of Form 982 blank. File 2009 taxes for free However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. File 2009 taxes for free 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. File 2009 taxes for free 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). File 2009 taxes for free 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. File 2009 taxes for free Kathy and Frank reduce the basis in the car by $14,956. File 2009 taxes for free 52 ($43,000 x $16,000/$46,000). File 2009 taxes for free And they reduce the basis in the household furnishings by $28,043. File 2009 taxes for free 48 ($43,000 x $30,000/$46,000). File 2009 taxes for free   Following are Kathy and Frank's sample forms and worksheets. File 2009 taxes for free Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 1099-C, Cancellation of Debt Table 1-1. File 2009 taxes for free Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. File 2009 taxes for free Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). File 2009 taxes for free Otherwise, go to Part 2. File 2009 taxes for free 1. File 2009 taxes for free 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. File 2009 taxes for free 00 2. File 2009 taxes for free Enter the fair market value of the transferred property $1,750,000. File 2009 taxes for free 00 3. File 2009 taxes for free Ordinary income from the cancellation of debt upon foreclosure or repossession. File 2009 taxes for free * Subtract line 2 from line 1. File 2009 taxes for free If less than zero, enter zero. File 2009 taxes for free Next, go to Part 2 $0. File 2009 taxes for free 00 Part 2. File 2009 taxes for free Gain or loss from foreclosure or repossession. File 2009 taxes for free   4. File 2009 taxes for free Enter the smaller of line 1 or line 2. File 2009 taxes for free 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. File 2009 taxes for free $1,750,000. File 2009 taxes for free 00 5. File 2009 taxes for free Enter any proceeds you received from the foreclosure sale   6. File 2009 taxes for free Add line 4 and line 5 $1,750,000. File 2009 taxes for free 00 7. File 2009 taxes for free Enter the adjusted basis of the transferred property $3,000,000. File 2009 taxes for free 00 8. File 2009 taxes for free Gain or loss from foreclosure or repossession. File 2009 taxes for free Subtract line 7 from line 6 ($1,250,000. File 2009 taxes for free 00) * The income may not be taxable. File 2009 taxes for free See chapter 1 for more details. File 2009 taxes for free    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. File 2009 taxes for free 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. File 2009 taxes for free Credit card debt $ 18,000 2. File 2009 taxes for free 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. File 2009 taxes for free Car and other vehicle loans $ 4. File 2009 taxes for free Medical bills owed $ 5. File 2009 taxes for free Student loans $ 6. File 2009 taxes for free Accrued or past-due mortgage interest $ 7. File 2009 taxes for free Accrued or past-due real estate taxes $ 8. File 2009 taxes for free Accrued or past-due utilities (water, gas, electric) $ 9. File 2009 taxes for free Accrued or past-due child care costs $ 10. File 2009 taxes for free Federal or state income taxes remaining due (for prior tax years) $ 11. File 2009 taxes for free Judgments $ 12. File 2009 taxes for free Business debts (including those owed as a sole proprietor or partner) $ 13. File 2009 taxes for free Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. File 2009 taxes for free Other liabilities (debts) not included above $ 15. File 2009 taxes for free Total liabilities immediately before the cancellation. File 2009 taxes for free Add lines 1 through 14. File 2009 taxes for free $ 768,000 Part II. File 2009 taxes for free 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. File 2009 taxes for free Cash and bank account balances $ 15,000 17. File 2009 taxes for free 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. File 2009 taxes for free Cars and other vehicles $ 10,000 19. File 2009 taxes for free Computers $ 20. File 2009 taxes for free Household goods and furnishings (for example, appliances, electronics, furniture, etc. File 2009 taxes for free ) $ 17,000 21. File 2009 taxes for free Tools $ 22. File 2009 taxes for free Jewelry $ 23. File 2009 taxes for free Clothing $ 24. File 2009 taxes for free Books $ 25. File 2009 taxes for free Stocks and bonds $ 26. File 2009 taxes for free Investments in coins, stamps, paintings, or other collectibles $ 27. File 2009 taxes for free Firearms, sports, photographic, and other hobby equipment $ 28. File 2009 taxes for free Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. File 2009 taxes for free Interest in a pension plan $ 30. File 2009 taxes for free Interest in education accounts $ 31. File 2009 taxes for free Cash value of life insurance $ 32. File 2009 taxes for free Security deposits with landlords, utilities, and others $ 33. File 2009 taxes for free Interests in partnerships $ 34. File 2009 taxes for free Value of investment in a business $ 35. File 2009 taxes for free Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. File 2009 taxes for free Other assets not included above $ 37. File 2009 taxes for free FMV of total assets immediately before the cancellation. File 2009 taxes for free Add lines 16 through 36. File 2009 taxes for free $ 42,000 Part III. File 2009 taxes for free Insolvency 38. File 2009 taxes for free Amount of Insolvency. File 2009 taxes for free Subtract line 37 from line 15. File 2009 taxes for free If zero or less, you are not insolvent. File 2009 taxes for free $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. File 2009 taxes for free Please click the link to view the image. File 2009 taxes for free Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications