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Occurrence
Formaldehyde is an intermediate in the oxidation (or combustion) of methane as well as other carbon compounds, e.g. forest fires, in automobile exhaust, and in tobacco smoke. When produced in the atmosphere by the action of sunlight and oxygen on atmospheric methane and other hydrocarbons, it becomes part of smog.
Formaldehyde, as well as its oligomers and hydrates are rarely encountered in living organisms. Methanogenesis proceeds via the equivalent of formaldehyde, but this one-carbon species is masked as a methylene group in methanopterin. Formaldehyde is the primary cause of methanol's toxicity, since methanol is metabolised into toxic formaldehyde by alcohol dehydrogenase. Formaldehyde is converted to formic acid in the body. Formaldehyde has been detected in outer space (see below).
I think a lot of misinformation is peddled out there about a lot of things.