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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: 32,697
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: 32,697
Experience: Taxes, Immigration, Labor Relations
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Lev and 87 other Tax Specialists are ready to help you
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Customer reply replied 1 month 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?
Phone call session started
Customer reply replied 1 month 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 1 month 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 1 month 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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Lev
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