Hello Everyone,

I have 3 rental properties in Michigan that will be foreclosed on this year. I'm trying best to understand and prepare for the 1099 C's that I will receive in regards to the debt that will be forgiven by each mortgage bank for each loan.

House 1: 116k Balance, Fair market Value 105k; 11k forgiven
House 2: 83k Balance, Fair market Value 30k: 53k forgiven
House 3: 90k Balance, Fair market Value 30k 60k forgiven

So, portentially, I'm looking at about 124k in 1099 C's that I will receive when all is said and done.

Since I do not want to proceed with a bankruptcy (I'm self employeed and that a mess I don't want to deal with) my next best alternative, to my understanding, is to declare insolvency with the IRS to help alleviate the tax liability I face. This is where I need help... specifically what debts can I claim to help my case. Do the rental debts count, credit card, car loan, etc? I have no assets besides my truck and personal property (and a motorhome worth about 6K)..

I'm going to set up a meeting with my CPA to get as much information as I can... but if I can go in with any knowledge beforehand I would greatly appreciate it

Hello E:

Way back in my tiny little head, I remember some new that would forgive taxes you owe on the supposed "income" you received by the bank forgiving some of your debt.

For sure your CPA will know about it. I hope there's room in in my head for the correct stuff.

excon