Archive for July 2022
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-4)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-4)What if I file for bankruptcy protection?Debts discharged through bankruptcy are not considered taxable income. If you are anindividual debtor who files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code,a separate “estate” is created consisting of property that belonged to you before…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-3)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-3)What if I am insolvent? A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. Theforgiven 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…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-2)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-2)What if my debt is forgiven?The tax impact of debt forgiveness or cancellation depends on your individual factsand circumstances. Generally, if you borrow money from a commercial lender andthe lender later cancels or forgives the debt, you may have to include the cancelledamount in income…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-1)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-1)What if I sell my home for a loss?Losses from the sale of personal–use property, such as your home or car, are notdeductible. It is not eligible for the capital gains loss of up to $3,000 annually.IRS Publication 523, Selling Your Home, explains the tax…
Read More