[gold_miners_daughter]

I normally get a decent income tax refund every year. My house foreclosed last year and I need to file a 982 debt forgiveness form. Does this mean I will not get any tax refund?

[J-10]

It might, it might not. There are multiple factors that determine if you have to pick up income from the cancellation of debt, and we don't know what your individual situation is. The IRS has setup a website regarding foreclosures/cancellation of debt income, and provide the following worksheets:Use the following steps to compute the income to be reported from a foreclosure:Step 1 - Figuring Cancellation of Debt Income (Note: For non-recourse loans, skip this section. You have no income from cancellation of debt.)1. Enter the total amount of the debt immediately prior to the foreclosure.___________2. Enter the fair market value of the property from Form 1099-C, box 7. ___________3. Subtract line 2 from line 1.If less than zero, enter zero.___________The amount on line 3 will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions in question 2. Enter it on line 21, Other Income, of your Form 1040.Step 2 – Figuring Gain from Foreclosure4. Enter the fair market value of the property foreclosed.For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure ________5. Enter your adjusted basis in the property.(Usually your purchase price plus the cost of any major improvements.) ____________6. Subtract line 5 from line 4. If less than zero, enter zero. The amount on line 6 is your gain from the foreclosure of your home. If you have owned and used the home as your principal residence for periods totaling at least two years during the five year period ending on the date of the foreclosure, you may exclude up to $250,000 (up to $500,000 for married couples filing a joint return) from income. If you do not qualify for this exclusion, or your gain exceeds $250,000 ($500,000 for married couples filing a joint return), report the taxable amount on Schedule D, Capital Gains and Losses.