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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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I short sold a home, not my primary residence and recieved

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I short sold a home, not my primary residence and recieved a 1099C for 89000 and one for 19000.
I have assets on the date of closing of about 80000 in my 401K and 32K Loan and 70K in an annuity. I have debt (credit card, car payment around 31K).

Could I benefit from insolvency
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 JustAnswer.com. Insolvency is determined immediately before your debt was discharged. You can exclude income up to the amount that your liabilities exceed your assets immediately before the discharge. So, you would add to your liabilities the debt that was discharged.

A worksheet to fill out on insolvency can be found, HERE. Scroll down a little bit to get to the worksheet. This will help you determine if you are insolvent. You can exclude your forgiveness of debt to the amount of your insolvency.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great day.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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Thank you for the positive rating. Please remember me the next time you have a question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer

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