What amount is reported on Form 982 to reduce the basis of property for the Wrights?

Form 982 is used to report a reduction in the basis of property due to the exclusion of discharged indebtedness from income. The requirement to file this form arises when a taxpayer has had a cancellation of debt income that is eligible for exclusion under specific provisions, such as insolvency or bankruptcy.

In the situation described, the choice stating that the Wrights are not required to file Form 982 suggests that they do not have any discharged indebtedness or do not meet the criteria that would necessitate reporting reductions in basis. This could happen if, for instance, no cancellation of debt occurred, or it was fully excluded under applicable tax laws without impacting the basis of their property.

Generally, if a taxpayer does not have applicable discharged debt or other relevant financial circumstances, they would not need to complete a Form 982, and thus no amount would be reported to reduce the basis of their property. Consequently, this response is consistent with the regulatory framework surrounding Form 982 and can help elucidate why there would be no requirement for the Wrights to file it in this specific scenario.