Statement of income from discharge of indebtedness worksheet
1. 61 12(a) Income from the discharge of indebtedness. The discharge of indebtedness, in whole or in part, may result in the realization of income. If, for example, an individual performs services for a creditor, who in consideration thereof cancels the debt, the debtor realizes income in the amount of the debt as compensation for his services.Measuring Insolvency Under Sec. 108 By Catherine Mary Sullivan, CPA, Gregory, Sharer& Stuart CPAs, St. Petersburg, Fla. provides for the exclusion of COD income if the debt discharge occurs when the taxpayer is insolvent. , if the taxpayer has COD income of 500, 000 and the excess of liabilities over assets immediately before the statement of income from discharge of indebtedness worksheet
Any taxpayer that excludes discharged debt from gross income must report the exclusion and related adjustments to tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to be filed with the income tax return for the tax year of the discharge.
Accrued or pastdue real estate taxes 8. Accrued or pastdue utilities (water, gas, electric) 9. Accrued or pastdue child care costs 10. Federal or state income taxes remaining due (for prior tax years) 11. Loans from 401(k) accounts and other retirement plans 12. Loans against life insurance policies 13. Insolvency Worksheet. Liabilities (Debts) Amount Owed on the Day Before the Cancellation. 1 Credit Card Debt 2 Mortgages(s) on real property (including first& second mortgages and home equity loans) mortgages(s) can be on personal residence, additional residence, or property held for investment or used in a trade or business.statement of income from discharge of indebtedness worksheet At the time of the discharge, the Full Market Value (FMV) of all of your assets totaled 7, 000 and your total liabilities totaled 10, 000. Therefore, you were insolvent to the extent of 3, 000 (10, 000 in liabilities minus 7, 000 in FMV of assets).
For a discharge of qualified farm indebtedness applied to reduce the basis of: a Depreciable property used or held for use in trade business the production of income if statement of income from discharge of indebtedness worksheet Discharge of Indebtedness, Bankruptcy and Insolvency (Portfolio 540) Part of Bloomberg Tax Tax Management Portfolio, Discharge of Indebtedness, Bankruptcy and Insolvency, No. 5403rd, examines and analyzes the tax treatment of individuals, corporations, and partnerships that realize income, inside or outside of his debt canceled, Greg can exclude the en tire 5, 000 canceled debt from income. When completing his tax return, Greg checks the box on line 1b of Form 982 and en ters 5, 000 on line 2. Greg completes Part II to reduce his tax attributes as explained under Re duction of Tax Attributes, later. The amount of the bene ts received during the tax year are exempt from Maine individual income tax. Enter on line 14 the amount of volunteer bene ts you received, up to 750, to the extent included in federal adjusted gross income. 36 M. R. S. 5122(2)(EE) and 6232(1A). Go to Other Deferral of Income Recognition From Discharge of Indebtedness. Select Section 1 COD Deferral Other Information. In Line 1 Election statement option, use the dropdown to select the appropriate election option. Select Section 2 Applicable Debt Instrument Information. Click Detail located in the upper right corner of the grid.Rating: 4.77 / Views: 475