jim:  How to report the qualified principal residence indebtedness exclusion. To show that all or part of your canceled debt is excluded from income because it is qualified principal residence indebtedness, attach Form 982 to your federal income tax return and check the box on line 1e. On line 2 of Form 982, include the amount of canceled qualified principal residence indebtedness, but not more than the amount of the exclusion limit (explained earlier). If you continue to own your home after a cancellation of qualified principal residence indebtedness, you must reduce your basis in the home as explained under Reduction of Tax Attributes, later.
2011-04-05 20:55:34

the tax lady:  None unless you are both liable and refinanced to spend money on a car or credit cards.. If the 1099-A says you are not liable, you won't even get a 1099-C. If the 1099-A says you are NOT liable, you show the sale of the property at the amount owed ($160K) and $0 allowable loss. No 982 since no cancelled debt. If the 1099-A says you ARE liable, get the 1099-C and use form 982, line 1e and 2.
2011-04-05 23:59:26