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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Family Law
Satisfied Customers: 17502
Experience:  B.A.; M.B.A.; J.D.
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California Family Law1. Husband pays alimony to

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California Family Law1. Husband pays alimony to wife.Husband owes family trusts (parent, not his own) $1m.Family is going to cancel his indebtedness through various means: gift, taking some assets and a settlement.Is cancellation of indebtedness from family, whether a gift or not, considered income available for support?If so, and if husband can’t afford to pay ex wife a portion of his canceled debt, what does he do? Does a divorce judge really make this considered to be income?2. Credit card company discharges debt of husband and issues 1099c.
Is that considered income available for support such that husband, who can’t pay the debt to begin with, needs to pay ex wife some of the cancellation income?
Submitted: 6 months ago.
Category: Family Law
Expert:  Phillips Esq. replied 6 months ago.
Cancellation of debt is regarded as income for income tax purposes. However, whether that cancelled debt would be regarded as available for support is another matter altogether and must be decided by the Court reviewing an application for modification of alimony. Kindly give a positive rating to my response so that I can receive credit for responding to your post. There is no additional cost to you for doing this. Thank you for your cooperation.

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