Hello and thank you for using Just AnswerIf you received the 1099A or C you must show the transfer as sale. Unfortunately you may not exclude the taxable portion of a 1099C for cancellation of debt on a vacation home. If you were insolvent the day before the forgiveness then you can use Form 982 to help you on the taxable portion.I hope this information is helpful and thank you in advance for clicking ACCEPT
What is insolvent?
That is when your liabilities are more than your assets
A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. You would need to look at all assets though even retirement accounts. The forgiven debt may be excluded as income under the "insolvency" exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982.
I have short sold 2 homes in 2011. At the time i could not afford to pay for them. Does that qualify?
I have no other assets either
If you owed more money than you had in accounts, property, and all items, then you were insolvent
Thanks for your help.
You would need to use Form982 to exclude the forgiveness from your income
You are welcome and please know that you can come back even after you click ACCEPT
I have that form but not sure what part to use Part 1 or 2
1 b I think
title 11 means bankruptcy?