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S UNDIN & F ISH , PLC CERTIFIED PUBLIC ACCOUNTANTS Insolvency Worksheet Liabilities (Debts) 1. Credit card debt 2. Mortgage(s) on all real property including 1st and 2nd mortgages and home equity.

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File IRS form 982 with your 1040 income tax form. The form is located at the IRS' website here: https://.irs.gov/pub/irs-pdf/f982.pdf. Simply list the dollar amount shown on the 1099c and indicate 1. (b) on the 982 form that you are insolvent.

A taxpayer is insolvent when his or her total liabilities exceed his or her total assets.

Make a list of your assets Bank account balances (include cash) Real property. Cars and other vehicles. Computers. Household goods and furnishings, such as appliances, electronics, and furniture. Tools. Jewelry. Clothing.

You are deemed to be insolvent if your total liabilities (debts) are greater than your total assets. Completing the insolvency worksheet at the bottom of this document will help you determine if you were insolvent at the time your debt was discharged.

The IRS Form 982 is the reduction of Tax Attributes Due to the Discharge of Indebtedness. This form is used to determine under the circumstances described in section 108 the amount of discharged indebtedness that can be excluded from a person's gross income.

To claim insolvency, you'll need to fill out IRS Forms 1099-C and 982. These forms should be filed with your federal income tax return for any year in which a discharge of indebtedness was excluded from your income. Form 1099-C reports cancellation of debt (greater than $600) to the IRS.

If you are insolvent you need to explain this to the IRS in one of two ways. By filing IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, or. Attaching a detailed letter to your tax return explaining the calculation of your total debts and assets.

A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may be excluded as income under the "insolvency" exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent.

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© Copyright 1997-2025
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232