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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12690
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Pearl JA: What is your issue regarding? Customer: Can't

Customer Question

Hi Pearl
JA: What is your issue regarding?
Customer: Can't seem to find an answer on whether insolvent debt cancellation applies in Wisconsin
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: According to Schd I it is not deductible, but according to several web sites it is. Now I'm confused.
JA: Anything else I can tell the Accountant before I connect you two?
Customer: No, just trying to find an exclusion for insolvency that applies to Wisconsin
JA: I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,...Because Wisconsin is one of the many states that use Federal AGI as the starting point for the state return, if income was excluded from Federal AGI (as this is) taxable income has already been reduced by the exclusion....The only way the income would "come back into" state taxable income is of it were one of the items subject to adjustment on schedule I and it is not....Principle residence exclusion, by the way, IS an adjustment item (not excluded from Wisconsin taxable income)...If you'll look at item 14 in the instructions for Schedule I (page 4)...'ll see the following:..."Wisconsin – The exclusion from gross income for income from discharge of indebtedness on a qualified principal residence does not apply for Wisconsin."...But if you'll look through the adjustments, you'll not see the insolvency exclusion (an exclusion that has been around since the 40's, where principle residence has only been in the code since 2007) included as an adjustment. (see pages 2 through 6 for the full list.)
Expert:  Lane replied 1 year ago.
I hope this has helped....Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit I know it takes an extra step, but JustAnswer won’t credit us for the work until you rate....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986.
Expert:  Lane replied 1 year ago.
Hi,...I’m just checking back in to see how things are going....Did my answer help?...Let me know…...ThanksLane