Tax Girl Kelly Phillips Erb tells us that the IRS has issued a new publication giving taxpayers guidance on the tax treatment of canceled debt and how to determine insolvency:
You see, canceled debt (like credit card debt after it is forgiven) is reportable – and taxable – as income to the IRS unless you meet an exception. Insolvency is one of those exceptions. The definition of insolvency is debt that exceeds your assets. But many taxpayers find that difficult to quantify. So the IRS has a handy worksheet to help you figure it out. To view the insolvency worksheet as a pdf, click here.
Go read the entire post and peruse the rest of Tax Girl’s site.
She’s very good.
Bookmark & Share:
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment