January 29, 2008

Insolvent

Filed under: Debt Settlement

What is the gest of irs Form 982

Betteye

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Hi Betteye,

It’s a means of showing the IRS that the debtor is insolvent at the time of cancellation of debt.  Insolvency is a situation that exists when total debts exceed total assets and it provides for an exclusion for having to pay taxes on the COD.

In the case of mortgage debt forgiveness on a primary residence, we also have the Mortgage Forgiveness Debt Relief Act of 2007.

Thanks for the questions and hope this helps.

Paul

This author is not an accountant or attorney and this information should not be considered tax or legal advice.  Please consult an accountant or attorney for tax and legal advice.

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