SECTION 9. DRAFTING

INFORMATION

The principal authors of this revenue procedure are Ronald J. Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Pflanz and Sheldon A. Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622–4910, Income Tax and Accounting branch 4 at (202) 622–4920, or Financial Institutions and Products branch 1 at (202) 622–3920 (not toll-free calls).

debtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing.

.04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced .

(1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year.

(2) A HAMP-PRA borrower who has been using the method described in section 6.02(1) of this revenue procedure may

change to the method described in section 6.02(2) but must comply with the consistency and open-year requirements described in section 6.01 of this revenue procedure.