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I am looking into debt cancellation and insolvency filing…

Hello. I am...

Hello. I am looking into debt cancellation and insolvency filing and how to do that if you are filing married/jointly but the debt cancelled is in separate names.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

How to do a claim for insolvency between assets and liabilities. Do we file separate or do we file jointly and do the assets and liabilities separate?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I am not sure how to answer that. That is my question. Do you need the specifics of the assets and liabilities?

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Answered in 10 minutes by:
3/7/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,142
Experience: Taxes, Immigration, Labor Relations
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If you are filing a joint tax return - but debts are separate debts - you have a choice - either to prepare a combined insolvency worksheet OR separate worksheets fro each spouse.

It might be either to have a joint insolvency worksheet - as you will combine all assets and all debts and would not worry about allocation.

Please prepare the worksheet as on the day BEFORE the debt was cancelled - so that cancelled debt is included into the worksheet.

If you have several cancelled debts - and they were cancelled on different dates - you will need separate worksheets.

I will help you with determination if needed.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,142
Experience: Taxes, Immigration, Labor Relations
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Customer reply replied 4 months ago
Ok. 3 of the cancelled card debt is in my name and 1 in hers. The house is in my name and 1 car. Her car is in both our names. She also has a retirement fund of course in her name. I assume life insurance is not an asset. The mortgages are both in my name. My belief was filing separately. What would you need to help me make that determination?
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Customer reply replied 4 months ago
Can we just continue by online chat?

I will ask to cancel your phone service request - do not worry.
We may continue to communicate here.

Regardless if you filing jointly - you may choose to prepare worksheet jointly or separately.

I suggest to start with joint worksheets - and if that doesn't work well for you - you may switch to separate worksheets.

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Customer reply replied 4 months ago
Are those available online? (worksheets)

Yes - you may take from this publication - page 6

https://www.irs.gov/pub/irs-pdf/p4681.pdf

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Customer reply replied 4 months ago
Ok. I will check into it and check back if I need to. Thank you for your time!

Here is fillable insolvency worksheet - that you may prepare online and download or print when it is ready.

https://irs-insolvency-form.pdffiller.com/

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