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Debt Relief – Insolvency – Bankruptcy Information » Bankruptcy Help

Form 982 to Avail of Reduced Taxable Income on Forgiven Debt

If you have any financial obligation that was partly or entirely forgiven, you must file Form 982 to report “discharge of indebtedness.” In most cases, the amount you have obtained as forgiven debt is included in your gross income and is, therefore, taxable. Under certain circumstances as described in IRS Code Section 108, you are allowed to exclude the discharged debt by filing Form 982 together with your income tax return. With this form, exemptions can be availed so you don’t have to pay taxes on the cancelled debt. Common exclusions include bankruptcy, insolvency, non-recourse loans and indebtedness due to real property losses. When an individual qualifies for debt forgiveness, the lender will send form 1099-C also called Cancellation of Debt. The forgiven amount appears on this form in box number … Read entire article »

Filed under: Bankruptcy Help, Debt Relief, Featured Articles, Insolvency

Basics of Cancellation of Debt Income

Cancellation of debt income may be defined as the amount of debt forgiven by a creditor without requiring any considerations in return. The amount of debt forgiven by the cancellation of debt by a creditor might be considered as income to the debtor and hence would have to be reported as part of the individual’s gross income. Usually, such income might fall under the tax purview and may be taken up as ordinary income to the taxpayer. Hence the amount would be known as cancellation of debt income or CODI. If the cancellation of debt income might be taxable, then the debtor would be given a Form 1099-C at the financial year end where in the amount of the forgiven debt would be shown as taxable income. For example, if … Read entire article »

Filed under: Bankruptcy Help, Insolvency

IRS Insolvency Worksheet

Keeping a record of one’s total liabilities and assets in the IRS insolvency worksheet is important in proving that insolvency exists prior to cancellation of debt in one’s income. Debt Insolvency offers a complete guide on how to deal with insolvency and bankruptcy problems through well researched information and helpful links regularly updated for the user’s benefit. Cancelled debt is considered an income when a liability is forgiven. This is usually added as miscellaneous income on a person’s tax return and is therefore taxable. There are ways to exclude forgiven debt from taxable income and one measure involves discharging the liability in a bankruptcy. A person can qualify for exclusion of forgiven debt as income by proving an insolvency status before the cancellation of debt. An insolvency worksheet IRS needs to be … Read entire article »

Filed under: Bankruptcy Help, Foreclosure Help, Insolvency

Form 982 Short Sale

A lot of people nowadays are being sent 1099-C to settle individual debts or debt consolidation. Upon receiving this form, make sure qualification is adequate in case one applies for IRS Form 982 to reduce the taxable income from cancelled debt. Checking box 1a means a discharge of indebtedness. The amount discharged for bankruptcy is recorded on line 2a and should only be listed on line 10a if one likes to retain non-depreciable assets and if the amount is above the remaining debt after the bankruptcy discharge. One other circumstance that the debtor can be charged by the taxman is if form 982 short sale conditions were not met. A short sale occurs when an excess exists on the amount the debtor owes the creditor upon filing for bankruptcy. The excess … Read entire article »

Filed under: Bankruptcy Help, Foreclosure Help, Insolvency

New Directive to IRS Tax Debt

Article by Ask Bill IRS tax debt could be described as the amount of money owed by a taxpayer to the Internal Revenue Service in the form of back taxes, filing of returns and other penalties levied by the IRS. Now, this is what David Green did not know. He was under the impression that if he did not file his tax returns for one year, then he would not be penalized. He also was of the opinion that since his mortgage debt was cancelled and since he did not earn any additional income because of the cancellation, he would not have to pay any taxes. Hence he ignored the Form 1099C which his creditor had issued at the time of Cancellation. David felt like he was hit by a bolt … Read entire article »

Filed under: Bankruptcy Help, Insolvency

Can I Stop My House Foreclosure if I File Bankruptcy?

Article by Lisa Jones Real estate has been steadily declining since 2007 from their previous highs. Anyone who bought a house in or before the year 2000 should be okay. However, this is dependent upon the fact of them taking equity out or if they refinanced their houses. If these homeowners do not have a steady job, they could be in for a hard time. Some of them had subprime loans to grab their property’s equity to use it for buying an expensive car or boat. The prices have dropped so drastically now that these people are underwater with their mortgages and they owe more on the house than it would sell for. Today, a lot of these loans are becoming due and many people are beginning to panic, trying to … Read entire article »

Filed under: Bankruptcy Help, Foreclosure Help, Foreclosure Law, Insolvency

Debt Settlement and the IRS – How to Figure Out If You’re Insolvent at the Time of Pay Out

When any financial institution settles a portion of your debt, then they issue a 1099-C. This 1099-C reflects the amount that has been settled. The IRS will consider the amount mentioned in 1099-C as taxable. This tax can only be avoided if you can prove insolvency at the time of settlement. In order to do this you will have to follow a few steps. First you must compile all your 1099-C and get the total amount that has been settled or cancelled by your creditors. Let’s say you had a debt of $ 10,000 and creditors settled it for $ 5000. At the time of settlement your creditor will issue a 1099-C with $ 5000 mentioned on it. As per rules, any settlement amount above $ 600 has to be informed … Read entire article »

Filed under: Bankruptcy Help, Insolvency

Wal-Mart – High Cost of Low Price part 2 of 10

Part 2 out of 10 of a film about how the largest supermarket chain in the USA are being paid and begged to open new stores in towns, while they are abusing the American people. Wal-mart have been begged and paid to establish new stores in towns all over America. As soon as the store opens, local shops are forced to declare bankruptcy since they cannot compete with Wal-Marts prices. Employees are victims for racism, and lack of proper health insurance through the job. Wal-Mart wants to put the responsibility on MediCare in order for them to save money. The company don’t care about the environment, and they care even less about the Chinese that make all lots of the goods you by for a cheap amount of money. They … Read entire article »

Filed under: Bankruptcy Help

Mayor Ed Koch on rent control, his sexuality, Andrew Cuomo, and how he helped save New York

In 1978, New York City was crumbling and the leading indicator of America’s seemingly irreversible decline. The South Bronx, once a thriving middle-class neighborhood, had became a national symbol of urban horror. From 1960 to 1980, New York’s murder rate tripled. Out-of-control spending had brought the city to the brink of bankruptcy, leading to a state takeover of its finances. The city’s subway was plauged by crime, graffiti, and equipment breakdowns. On July 13th, 1977, the city reached its nadir when a 24-hour blackout gave way to mass looting. Bushwick, a working-class neighborhood in Brooklyn, was practically burned to the ground. Then in 1978, Edward Irving Koch became New York’s 105th Mayor. A veteran congressman from Manhattan, Koch’s chutzpah was exactly what the city needed. A self-proclaimed “liberal with sanity,” … Read entire article »

Filed under: Bankruptcy Help

I am in terrible shape… I have bills and creditors calling all the time can anyone offer me any advise HELP!

I have tried debt solutions companies but they want more than I can afford..I can’t refinance my home b/c of my score and debt to income ratio. It seems like the harder I try the further I fall back. No one wants to give me advise except to file bankruptcy and I just can’t bring myself to do that. Most of the bills are charge cards which have been destroyed now. Can someone please help me. … Read entire article »

Filed under: Bankruptcy Help

I am thinking about filing for bankruptcy soon?

About two years ago, me and my (then-expecting) wife bought our home for 220k. It is currently worth 120k. The market really hit us hard. The 2 year mark for the loan just passed and because of the crappy rate we got, our payments have gone up another 600 dollars. I stopped paying the HOA fees because I couldnt afford them anymore. They are going to begin garnish my wages for the HOA fees (Court order). I will no longer be able to afford my home.. I am super depressed about it, my life’s in shambles because of this. My neighborhood has For sale houses everywhere and Section 8 renters are ruining the nieghborhood with crime and drugs and their wrecklessness. I cannot allow my son to live in this … Read entire article »

Filed under: Bankruptcy Help

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