How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2033
Experience:  Certified Public Accountant
Type Your Tax Question Here...
Mark Taylor is online now
A new question is answered every 9 seconds

I am helping my ex with his taxes. His house was foreclosed

Customer Question

I am helping my ex with his taxes. His house was foreclosed on in Nov 2015. He has canceled debt of $46k. I am wondering how to go about getting this exempt for California under insolvency? He had lost his job and was on unemployement for several months before he lost the house. The only other asset he owned was a truck and motorcycle, so his liabilities far exceeded his assets. He had already been penalized for cashing out his 401k just to pay his property taxes and mortgage. Any thoughts?
Submitted: 8 months ago.
Category: Tax
Expert:  Mark Taylor replied 8 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response. Did he receive the cancellation of debt in 2015?

Customer: replied 8 months ago.
he received it in 2015 and it is exempt from tax for Federal, but not automatic from California
Expert:  Mark Taylor replied 8 months ago.

Ok thank you. I just wanted to make sure that the Cancellation of Debt was from 2015.

Expert:  Mark Taylor replied 8 months ago.

California does not conform to federal rules regarding cancellation of debt income. On December 31, 2013 the debt cancellation relief for home owners expired.

Customer: replied 8 months ago.
My question was regarding relief from Insolvency. I already know that it doesn't conform to Federal. My question is regarding steps to be taken for California purposes? Is this in your realm of expertise?