When a taxpayer excludes income from qualified principal residence indebtedness (QPRi), they must reduce the basis of their Depreciable property before reducing other assets. Principal residence. Tax attributes in the order listed on Form 982. Tax attributes on Form 982 in any order. Mark for follow up Question 12 of 75. No taxable income is recognized from cancellation of debt when the Canceled debt was recourse debt. Canceled debt was for the taxpayer's second home. Cancellation of debt was intended as a gift. Taxpayer was solvent prior to the cancellation of debt. Mark for follow up