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View Full Version : How can I prove insolvency to the IRS?


kev7165
Feb 1, 2008, 07:21 AM
I received a 1099c for the short sale of my home. I did not have many assets at the time of the sale, now I need to now how I can prove this to the IRS. I do not want to have to claim over $100,000 as income on my tax return. Can anyone please help me. Thank you.

AtlantaTaxExpert
Feb 2, 2008, 12:03 AM
There is a provision under the latest set of tax laws that allow people to waive filing income taxes on Forms 1099-C for foreclosures.

Contact a local tax professional to get help filing your return.

MukatA
Feb 2, 2008, 04:00 AM
You did not receive 1099-A; you received 1099-C, which is cancellation of debt. It is income. But since your house was repossessed, you have a sale.

Now you have to figure out your profit and loss from the sale taking into consideration 1099-C. If you have gain, then you can exclude gain up to $250,000 if you meet Home Sale exclusion requirements.
Yes, as AtlantaTaxExpert said, contact a local tax professional.

AtlantaTaxExpert
Feb 3, 2008, 06:31 PM
Noted!