Question $9$ of $15.$

Which of the following statements is TRUE regarding Form $982$ and the reduction of tax attributes required for the Qualified Principal Residence Indebtedness $($QPRI$)$ exclusion? Form $982$ is $\_\_\_\_\_\_\_\_\_.$

$-$ Not required in the year cancellation of debt income is realized since tax attributes are not reduced until the beginning of the year following the cancellation.

$-$ Not required in the year of cancellation but the tax attributes are reduced in the year of cancellation.

$-$ Required in the year of cancellation since tax attributes must be reduced as of the date of cancellation.

$-$ Required in the year of cancellation to report the principal residence basis reduction on line $10$b$,$ which is not carried out until the year following the cancellation.