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Maybe! A taxpayer wishes to claim insolvency to exclude

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Maybe! A taxpayer wishes...

Maybe! A taxpayer wishes to claim insolvency to exclude cancelled debt income from taxation. He has an interest in an employment pension fund which he cannot access until a certain age. Does it count as an asset in the insolvency calculation?

Submitted: 11 months ago.Category: Tax
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9/21/2017
Tax Professional: Robin D., Senior Tax Advisor 4 replied 11 months ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,405
Experience: 15years with H & R Block. Divisional leader, Instructor
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Tax Professional: Robin D., Senior Tax Advisor 4 replied 11 months ago

It does count.

When applying the insolvency test of § 108(d), a taxpayer's interest in a pension plan or other assets that are exempt from creditor's claims should be included as assets of the taxpayer. An interest in a pension plan should be valued when calculating insolvency.

You can see the following

https://www.irs.gov/pub/irs-sca/1998-039.pdf

The cases cited in the above are relevant to you and the question

Please let me know if you need more information.
If not then scroll up to see the STARS to rate so I am credited. Let me know

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 11 months ago

Hi just checking back to see if you responded

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