Cancellation of Debt - Insolvency
This handout defines what it means to be insolvent. Cancellation of Debt - Insolvency It includes a worksheet for a taxpayer to determine if he or she is insolvent and it explains the tax implications of cancelled debt.
Tax treatment of cancelled debt.
Form 1099-C, Cancellation of Debt.
Taxpayer insolvency and insolvency worksheet.
Reduction of tax attributes due to discharge of debt.
CLIENTS WHO MAY BENEFIT:
Taxpayers who have had debt cancelled.
Taxpayers who are considering a debt negotiation plan.