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Taxact 2006 Free Download

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Taxact 2006 Free Download

Taxact 2006 free download Index A Accounting methods Accrual method, Accrual Method Cash method, Cash Method Change in, Change in Accounting Method Methods you can use, Methods you can use. Taxact 2006 free download Accounting periods 52-53 week tax year, 52-53-Week Tax Year Business purpose tax year, Business Purpose Tax Year Calendar year, Calendar Year Improper tax year, Improper Tax Year Partnerships, Partnership Accrual method Expenses, Expenses Income, Income Advance payments, Advance Payment for Services Sales, Advance Payment for Sales Services, Advance Payment for Services Assistance (see Tax help) B Business purpose tax year, Business Purpose Tax Year C Calendar year, Calendar Year Cash method, Income Expenses, Expenses Income, Income Change, accounting method, Change to accrual method. Taxact 2006 free download , Change in Accounting Method Comments on publication, Comments and suggestions. Taxact 2006 free download Constructive receipt of income, Constructive receipt. Taxact 2006 free download Corporation tax periods, Corporations (Other Than S Corporations and PSCs) Cost identification, Identifying Cost D Death of individual, short period return, Death of individual. Taxact 2006 free download E Economic performance, Economic Performance Excluded entities, cash method, Excluded Entities F Fiscal year, Fiscal Year Form 1128, Improper Tax Year, Change in Tax Year 8716, Making the election. Taxact 2006 free download , Making back-up election. Taxact 2006 free download 8752, Required payment for partnership or S corporation. Taxact 2006 free download , Activating election. Taxact 2006 free download 970, Adopting LIFO method. Taxact 2006 free download Free tax services, How To Get Tax Help H Help (see Tax help) I Inventories Cost identification, Identifying Cost FIFO, FIFO Method LIFO, LIFO Method Lower of cost or market, Lower of Cost or Market Method Perpetual or book, Perpetual or Book Inventory Retail method, Retail Method Specific identification, Specific Identification Method Uniform capitalization rules, Inventories. Taxact 2006 free download Valuing, Valuing Inventory M More information (see Tax help) P Partnerships, Partnership Personal service corporation, Partnerships, S Corporations, and Personal Service Corporations (PSCs) Limit, use of cash method, Qualified PSC. Taxact 2006 free download Required tax year, Partnerships, S Corporations, and Personal Service Corporations (PSCs), Personal Service Corporation (PSC) Publications (see Tax help) R Related persons, Related Persons S S corporations, S Corporation Section 444 election, Section 444 Election Short period return, Short period return. Taxact 2006 free download Short tax year, Short Tax Year Suggestions for publication, Comments and suggestions. Taxact 2006 free download T Tax help, How To Get Tax Help Tax year Change in, Change in Tax Year Corporations, Corporations (Other Than S Corporations and PSCs) Fiscal year, Fiscal Year Personal service corporation, Personal Service Corporation (PSC) S corporations, S Corporation Section 444 election, Section 444 Election Short tax year, Short Tax Year Taxpayer Advocate, Taxpayer Advocate Service. Taxact 2006 free download TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Exceptions, Exceptions. Taxact 2006 free download General rules, Uniform Capitalization Rules Prev  Up     Home   More Online Publications
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The Taxact 2006 Free Download

Taxact 2006 free download 4. Taxact 2006 free download   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. Taxact 2006 free download However, the information shown on the filled-in forms is not from any actual person or scenario. Taxact 2006 free download Example 1—Mortgage loan modification. Taxact 2006 free download    In 2007, Nancy Oak bought a main home for $435,000. Taxact 2006 free download Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. Taxact 2006 free download The loan was secured by the home. Taxact 2006 free download The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. Taxact 2006 free download 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. Taxact 2006 free download    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. Taxact 2006 free download The FMV of Nancy's home at the time of the refinancing was $500,000. Taxact 2006 free download 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. Taxact 2006 free download 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. Taxact 2006 free download   In 2013, Nancy was unable to make her mortgage loan payments. Taxact 2006 free download 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. Taxact 2006 free download Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. Taxact 2006 free download   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. Taxact 2006 free download Identifiable event code "F" appears in box 6. Taxact 2006 free download This box shows the reason the creditor has filed Form 1099-C. Taxact 2006 free download 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. Taxact 2006 free download Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. Taxact 2006 free download   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. Taxact 2006 free download 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. Taxact 2006 free download 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. Taxact 2006 free download 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). Taxact 2006 free download   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. Taxact 2006 free download 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). Taxact 2006 free download Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. Taxact 2006 free download You can see Nancy's Form 1099-C and a portion of her Form 1040 below. Taxact 2006 free download Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 1040, U. Taxact 2006 free download S. Taxact 2006 free download Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. Taxact 2006 free download    In 2005, John and Mary Elm bought a main home for $335,000. Taxact 2006 free download John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. Taxact 2006 free download The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. Taxact 2006 free download   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. Taxact 2006 free download 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. Taxact 2006 free download   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. Taxact 2006 free download Identifiable event code "D" appears in box 6. Taxact 2006 free download This box shows the reason the creditor has filed Form 1099-C. Taxact 2006 free download 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. Taxact 2006 free download In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. Taxact 2006 free download Their sample Form 1099-C is shown on this page. Taxact 2006 free download   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). Taxact 2006 free download 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. Taxact 2006 free download   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). Taxact 2006 free download Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. Taxact 2006 free download 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. Taxact 2006 free download As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. Taxact 2006 free download 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. Taxact 2006 free download Thus, John and Mary leave line 10b of Form 982 blank. Taxact 2006 free download   John and Mary must also determine whether they have a gain or loss from the foreclosure. Taxact 2006 free download John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. Taxact 2006 free download Because this loss relates to their home, it is a nondeductible loss. Taxact 2006 free download   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. Taxact 2006 free download John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 1099-C, Cancellation of Debt Table 1-1. Taxact 2006 free download Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. Taxact 2006 free download Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Taxact 2006 free download Otherwise, go to Part 2. Taxact 2006 free download 1. Taxact 2006 free download 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. Taxact 2006 free download 00 2. Taxact 2006 free download Enter the fair market value of the transferred property $290,000. Taxact 2006 free download 00 3. Taxact 2006 free download Ordinary income from the cancellation of debt upon foreclosure or repossession. Taxact 2006 free download * Subtract line 2 from line 1. Taxact 2006 free download If less than zero, enter zero. Taxact 2006 free download Next, go to Part 2 $ 25,000. Taxact 2006 free download 00 Part 2. Taxact 2006 free download Gain or loss from foreclosure or repossession. Taxact 2006 free download   4. Taxact 2006 free download Enter the smaller of line 1 or line 2. Taxact 2006 free download 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. Taxact 2006 free download 00 5. Taxact 2006 free download Enter any proceeds you received from the foreclosure sale   6. Taxact 2006 free download Add line 4 and line 5 $290,000. Taxact 2006 free download 00 7. Taxact 2006 free download Enter the adjusted basis of the transferred property $335,000. Taxact 2006 free download 00 8. Taxact 2006 free download Gain or loss from foreclosure or repossession. Taxact 2006 free download Subtract line 7 from line 6 ($ 45,000. Taxact 2006 free download 00) * The income may not be taxable. Taxact 2006 free download See chapter 1 for more details. Taxact 2006 free download Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. Taxact 2006 free download 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. Taxact 2006 free download Credit card debt $ 5,500 2. Taxact 2006 free download 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. Taxact 2006 free download Car and other vehicle loans $ 4. Taxact 2006 free download Medical bills owed $ 5. Taxact 2006 free download Student loans $ 6. Taxact 2006 free download Accrued or past-due mortgage interest $ 7. Taxact 2006 free download Accrued or past-due real estate taxes $ 8. Taxact 2006 free download Accrued or past-due utilities (water, gas, electric) $ 9. Taxact 2006 free download Accrued or past-due child care costs $ 10. Taxact 2006 free download Federal or state income taxes remaining due (for prior tax years) $ 11. Taxact 2006 free download Judgments $ 12. Taxact 2006 free download Business debts (including those owed as a sole proprietor or partner) $ 13. Taxact 2006 free download Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Taxact 2006 free download Other liabilities (debts) not included above $ 15. Taxact 2006 free download Total liabilities immediately before the cancellation. Taxact 2006 free download Add lines 1 through 14. Taxact 2006 free download $ 320,500 Part II. Taxact 2006 free download 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. Taxact 2006 free download Cash and bank account balances $ 6,000 17. Taxact 2006 free download 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. Taxact 2006 free download Cars and other vehicles $ 19. Taxact 2006 free download Computers $ 20. Taxact 2006 free download Household goods and furnishings (for example, appliances, electronics, furniture, etc. Taxact 2006 free download ) $ 21. Taxact 2006 free download Tools $ 22. Taxact 2006 free download Jewelry $ 23. Taxact 2006 free download Clothing $ 24. Taxact 2006 free download Books $ 25. Taxact 2006 free download Stocks and bonds $ 26. Taxact 2006 free download Investments in coins, stamps, paintings, or other collectibles $ 27. Taxact 2006 free download Firearms, sports, photographic, and other hobby equipment $ 28. Taxact 2006 free download Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. Taxact 2006 free download Interest in a pension plan $ 30. Taxact 2006 free download Interest in education accounts $ 31. Taxact 2006 free download Cash value of life insurance $ 32. Taxact 2006 free download Security deposits with landlords, utilities, and others $ 33. Taxact 2006 free download Interests in partnerships $ 34. Taxact 2006 free download Value of investment in a business $ 35. Taxact 2006 free download Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Taxact 2006 free download Other assets not included above $ 37. Taxact 2006 free download FMV of total assets immediately before the cancellation. Taxact 2006 free download Add lines 16 through 36. Taxact 2006 free download $ 309,000 Part III. Taxact 2006 free download Insolvency 38. Taxact 2006 free download Amount of Insolvency. Taxact 2006 free download Subtract line 37 from line 15. Taxact 2006 free download If zero or less, you are not insolvent. Taxact 2006 free download $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download 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. Taxact 2006 free download    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. Taxact 2006 free download 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. Taxact 2006 free download Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. Taxact 2006 free download   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. Taxact 2006 free download The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. Taxact 2006 free download On December 26, 2013, the lender canceled the remaining debt. Taxact 2006 free download Kathy and Frank have no tax attributes other than basis of personal-use property. Taxact 2006 free download   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). Taxact 2006 free download Identifiable event code "D" appears in box 6. Taxact 2006 free download This box shows the reason the creditor has filed Form 1099-C. Taxact 2006 free download 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. Taxact 2006 free download Kathy and Frank are filing a joint return for 2013. Taxact 2006 free download   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. Taxact 2006 free download 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). Taxact 2006 free download 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. Taxact 2006 free download Because this loss relates to their home, it is a nondeductible loss. Taxact 2006 free download   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. Taxact 2006 free download 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. Taxact 2006 free download Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. Taxact 2006 free download The household furnishings originally cost $30,000. Taxact 2006 free download The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. Taxact 2006 free download Kathy and Frank had no adjustments to the cost basis of the car. Taxact 2006 free download Kathy and Frank had no other assets or liabilities at the time of the cancellation. Taxact 2006 free download 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). Taxact 2006 free download   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. Taxact 2006 free download 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). Taxact 2006 free download Kathy and Frank had no other assets or liabilities at that time. Taxact 2006 free download Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. Taxact 2006 free download   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. Taxact 2006 free download The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. Taxact 2006 free download 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. Taxact 2006 free download Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. Taxact 2006 free download 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). Taxact 2006 free download 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. Taxact 2006 free download   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. Taxact 2006 free download Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. Taxact 2006 free download 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. Taxact 2006 free download 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). Taxact 2006 free download   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. Taxact 2006 free download 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. Taxact 2006 free download Thus, Kathy and Frank leave line 10b of Form 982 blank. Taxact 2006 free download However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. Taxact 2006 free download 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. Taxact 2006 free download 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). Taxact 2006 free download 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. Taxact 2006 free download Kathy and Frank reduce the basis in the car by $14,956. Taxact 2006 free download 52 ($43,000 x $16,000/$46,000). Taxact 2006 free download And they reduce the basis in the household furnishings by $28,043. Taxact 2006 free download 48 ($43,000 x $30,000/$46,000). Taxact 2006 free download   Following are Kathy and Frank's sample forms and worksheets. Taxact 2006 free download Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 1099-C, Cancellation of Debt Table 1-1. Taxact 2006 free download Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. Taxact 2006 free download Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Taxact 2006 free download Otherwise, go to Part 2. Taxact 2006 free download 1. Taxact 2006 free download 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. Taxact 2006 free download 00 2. Taxact 2006 free download Enter the fair market value of the transferred property $1,750,000. Taxact 2006 free download 00 3. Taxact 2006 free download Ordinary income from the cancellation of debt upon foreclosure or repossession. Taxact 2006 free download * Subtract line 2 from line 1. Taxact 2006 free download If less than zero, enter zero. Taxact 2006 free download Next, go to Part 2 $0. Taxact 2006 free download 00 Part 2. Taxact 2006 free download Gain or loss from foreclosure or repossession. Taxact 2006 free download   4. Taxact 2006 free download Enter the smaller of line 1 or line 2. Taxact 2006 free download 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. Taxact 2006 free download $1,750,000. Taxact 2006 free download 00 5. Taxact 2006 free download Enter any proceeds you received from the foreclosure sale   6. Taxact 2006 free download Add line 4 and line 5 $1,750,000. Taxact 2006 free download 00 7. Taxact 2006 free download Enter the adjusted basis of the transferred property $3,000,000. Taxact 2006 free download 00 8. Taxact 2006 free download Gain or loss from foreclosure or repossession. Taxact 2006 free download Subtract line 7 from line 6 ($1,250,000. Taxact 2006 free download 00) * The income may not be taxable. Taxact 2006 free download See chapter 1 for more details. Taxact 2006 free download    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. Taxact 2006 free download 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. Taxact 2006 free download Credit card debt $ 18,000 2. Taxact 2006 free download 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. Taxact 2006 free download Car and other vehicle loans $ 4. Taxact 2006 free download Medical bills owed $ 5. Taxact 2006 free download Student loans $ 6. Taxact 2006 free download Accrued or past-due mortgage interest $ 7. Taxact 2006 free download Accrued or past-due real estate taxes $ 8. Taxact 2006 free download Accrued or past-due utilities (water, gas, electric) $ 9. Taxact 2006 free download Accrued or past-due child care costs $ 10. Taxact 2006 free download Federal or state income taxes remaining due (for prior tax years) $ 11. Taxact 2006 free download Judgments $ 12. Taxact 2006 free download Business debts (including those owed as a sole proprietor or partner) $ 13. Taxact 2006 free download Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Taxact 2006 free download Other liabilities (debts) not included above $ 15. Taxact 2006 free download Total liabilities immediately before the cancellation. Taxact 2006 free download Add lines 1 through 14. Taxact 2006 free download $ 768,000 Part II. Taxact 2006 free download 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. Taxact 2006 free download Cash and bank account balances $ 15,000 17. Taxact 2006 free download 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. Taxact 2006 free download Cars and other vehicles $ 10,000 19. Taxact 2006 free download Computers $ 20. Taxact 2006 free download Household goods and furnishings (for example, appliances, electronics, furniture, etc. Taxact 2006 free download ) $ 17,000 21. Taxact 2006 free download Tools $ 22. Taxact 2006 free download Jewelry $ 23. Taxact 2006 free download Clothing $ 24. Taxact 2006 free download Books $ 25. Taxact 2006 free download Stocks and bonds $ 26. Taxact 2006 free download Investments in coins, stamps, paintings, or other collectibles $ 27. Taxact 2006 free download Firearms, sports, photographic, and other hobby equipment $ 28. Taxact 2006 free download Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. Taxact 2006 free download Interest in a pension plan $ 30. Taxact 2006 free download Interest in education accounts $ 31. Taxact 2006 free download Cash value of life insurance $ 32. Taxact 2006 free download Security deposits with landlords, utilities, and others $ 33. Taxact 2006 free download Interests in partnerships $ 34. Taxact 2006 free download Value of investment in a business $ 35. Taxact 2006 free download Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Taxact 2006 free download Other assets not included above $ 37. Taxact 2006 free download FMV of total assets immediately before the cancellation. Taxact 2006 free download Add lines 16 through 36. Taxact 2006 free download $ 42,000 Part III. Taxact 2006 free download Insolvency 38. Taxact 2006 free download Amount of Insolvency. Taxact 2006 free download Subtract line 37 from line 15. Taxact 2006 free download If zero or less, you are not insolvent. Taxact 2006 free download $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. Taxact 2006 free download Please click the link to view the image. Taxact 2006 free download Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications