Form 982 - proving insolvency
Date: Wed, 05/14/2008 - 23:36
I still haven't found the search button (so sorry if I am repeating old threads & please direct me to it if you know where it is).
HOWEVER, I am starting major research on DIY debt settlement.
I am having some trouble understanding about Form 982. I believe it is when your debt outweighs your assets you don't have to pay taxes on the part that outweighs it, but I am not sure.
Also, I am obviously very ignorant, but assets include what exactly? I am 21 years old and so is my husband. we rent our house and we own two old cars. We have $20,000 unsecured debt.
In another thread also someone mentioned selling off their assets before starting to try to settle to make their assets less.......what do you think/know about this.
Thanks so much for any information you have for me!
ps. what kind of taxes would you have to pay on 10,000, we've always been lucky to get money back, so I am not sure and what can you do to prepare for this situation if you don't qualify for insolvency?
ok, so I found a post addressing my own question http://www.d
ok, so I found a post addressing my own question
http://www.debtconsolidationcare.com/settlement/debt-insolvency.html
my only other questions are
1) do student loans count as liabilities
2) what can you do about selling off assets? My biggest asset is my car (1725 according to blue book) and my engagement ring (3200 new) otherwise all our furniture came off craigslist. how do you price jewelry?
Student loans are a liability. The tax on $10K, figure 15%, w
Student loans are a liability.
The tax on $10K, figure 15%, will be $1500. You may have other credits that will reduce that number.
I wouldn't sell all my assets to get out of that tax, especially your wedding ring. Besides, selling your assets doesn't necessarily decrease them. Once you sell it then you have cash - which is still an asset. You would have to spend all that cash on non-assets in order to truly decrease your assets.
So you will get $1500 less of a refund at the end of the year ... I don't think it's worth selling all your stuff.
thanks so much. I agree w/ you, paying an extra $1500 dollars w
thanks so much. I agree w/ you, paying an extra $1500 dollars would not be worth selling my engagement ring even I didn't have to account for the money.
I am pretty excited because that means I will be insolvent for probably the whole forgiveness amount or most of it.
Thanks a lot!