Finance Questions? Ask a Financial Expert for Answers ASAP
Thank you for your question, and thanks for using JustAnswer.com
How are you today?
If you are insolvent, meaning your assets are less than your liabilities you can exclude the cancellation of debt from your income.
You will need to fill out form 982 claiming the insolvency exemption
I am doing okay, except that my underwriter wants verification of whether I need to pay taxes on my cancellation of debt from 2011. Can you help me with this?
Yes, if your assets are less than your liabilities then you will not pay tax on the cancellation of debt
What type of verification do they need?
Can I pay you to help me with this? My underwriter (I'm trying to buy a house) wants verification from a CPA that I do not have to pay the taxes on my cancellation of debt. I need your help.
I'm sorry, we can only provide you with general information. I cannot practice as an accountant, prepare returns, etc on the site.
My assets in 2011 were nil, I had much more debt than anything. SSDI was (and is) my only form of income (which, I know, I do not have to file taxes on).
Can you give me some advise on what to do?
Your underwriter should realize that if you have no assets then you are insolvent
If you need a letter from a CPA you will have to go to a local professional.
Smart :) but he wants verification that I do not have to pay taxes on the 2011 cancellation of debt. Where do I start looking for this verification?
If you need a letter from a CPA you would need to find a CPA in your area and take your information to them
Okay, thanks for your help. Is there an online source to get professional tax help?
I do not know of any online CPA firms. If you call around, you might find one that will do this all by phone or email
Thank you, XXXXX XXXXX do that.
You're welcome. I'm sorry I cannot provide that assistance. Is there anything else I can help you with today?
No, I'm on a mission. Thanks for your time.
You're welcome. If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today