Updated November 7, 2026. Quick answer: Part III of Form 982 is a consent made for a corporation: the corporation excludes from gross income, under section 1081(b), income from a transfer of property, and consents to have the basis of its property adjusted under section 1082(a)(2). It is separate from the exclusion boxes on Part I and the attribute reductions on Part II, and the form names a corporation throughout.
What the part says
The form’s Part III is titled as a consent. It states: “Under that section, the corporation consents to have the basis of its property adjusted in accordance with the regulations prescribed under section 1082(a)(2) in effect at the time of filing its income tax return for that year.” The same part adds: “Note: You must attach a description of the transactions resulting in the nonrecognition of gain under section 1081.”
What the instructions say it is for
“Use Part III to exclude from gross income under section 1081(b) any amounts of income attributable to the transfer of property described in that section.” The Part III instruction describes the default: “Unless it specifically states otherwise, the corporation, by filing this form, agrees to apply the general rule for adjusting the basis of property (as described in Regulations section 1.1082-3(b)).”
Asking for a different method
A corporation that wants something other than the general rule has a path: “If the corporation desires to have the basis of its property adjusted in a manner different from the general rule, it must attach a request for variation from the general rule.” The request has to show the method: “The request must show the precise method used and the allocation of amounts.” And it is not automatic: “Consent to the request for variation from the general rule will be effective only if it is incorporated in a closing agreement entered into by the corporation and the Commissioner of Internal Revenue under the rules of section 7121.” “If no agreement is entered into, then the general rule will apply in determining the basis of the corporation’s property.”
How Part III sits with Parts I and II
Part III is separate from the boxes on Part I and the attribute reductions on Part II. The form’s title already carries the pairing: Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), with the first part of the title for the debt-discharge rules and the parenthetical for this section 1082 basis adjustment.
Edition
This page reads Form 982 (Rev. March 2018), the Instructions for Form 982 (Rev. December 2021) and Publication 4681 for 2025 returns, all files irs.gov served on November 7, 2026 (sha256 in the kit data). The instructions point to IRS.gov/Form982 for later legislation, so check that page for anything enacted after these files were published.
Common mistakes
- Treating Part III as another exclusion box. It is a corporation’s consent under section 1082(a)(2), and the form names a corporation throughout.
- Assuming a different basis method is available by writing it on the form. A variation request must be attached and is effective only through a closing agreement.
- Leaving off the description of the transactions. The form says it must be attached.
Related: Form 982 Part I, and Form 982 Part II.
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Answer againSources
- Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (Rev. March 2018): https://www.irs.gov/pub/irs-pdf/f982.pdf
- Instructions for Form 982 (Rev. December 2021): https://www.irs.gov/pub/irs-pdf/i982.pdf
Read from the IRS documents linked above on November 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.