How much are the Caldwells required to reduce their tax attributes by on Form $982,$ Reduction of Tax Attributes Due to Discharge of Indebtedness $($and Section $1082$ Basis Adjustment$)?$ The Caldwells are:

Not required to file Form $982$ or reduce their tax attributes.

Required to reduce their tax attributes by $$5,000.$

Required to reduce their tax attributes by $$7,000.$

Required to reduce their tax attributes by $$12,000.$