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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16579
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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In 2012 I accepted a foreclosure prevention transaction offer

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In 2012 I accepted a foreclosure prevention transaction offer from Bank of America to forgive my home equity loan debt in the amount of $31,044. At the time I was not facing foreclosure proceedings nor declaring bankruptcy, though I was insolvent with respect to debts vs. assets. Do I owe taxes on this entire amount of loan forgiveness?
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thanks for using If your debts exceeded your assets by $31,044 before the forgiveness, you will not owe tax on the amount forgiven. On Form 982 you will check box 1b, write $31,044 on line 2 if the entire amount can be excluded.

Form 982 can be found here:

Please let me know if you need anything additional. Thanks again for using and have a happy, and safe, 2013.

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