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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2572
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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There is a loss from sale of the stocks from gas company.

Customer Question

there is a loss from sale of the stocks from gas company. The company is not doing well and on the 1065 k1 line 11, there is huge amount of cancellation debt. Is this debt all taxable, even though the stock was sold in a huge loss.
Submitted: 4 months ago.
Category: Finance
Expert:  Mark Taylor replied 4 months ago.

You are correct you would need to file a Non-Resident return for NY.

Expert:  Mark Taylor replied 4 months ago.

The cancellation of debt would be considered as income. There are some exceptions.

Expert:  Mark Taylor replied 4 months ago.

EXCLUSIONS from Gross Income:

The exclusion of cancellation of debt income would be the following:

  1. Debt canceled in a Title 11 bankruptcy case
  2. Debt canceled during insolvency
  3. Cancellation of qualified farm indebtedness
  4. Cancellation of qualified real property business indebtedness
  5. Cancellation of qualified principal residence indebtedness
Customer: replied 4 months ago.
I am asking my question elsewhere. Please do not feel offended.
Expert:  Mark Taylor replied 4 months ago.

I am not offended at all. Do you still want my input. I am sorry I had to step away.

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