Need help quick - Debt Settlement and Insolvency

Date: Thu, 10/13/2011 - 15:24

Submitted by Michael Stevens
on Thu, 10/13/2011 - 15:24

Posts: 34 Credits: [Donate]

Total Replies: 2

Hey all. I need some help here. You guys helped me in 2009-2010 to get through my Debt settlement nightmare. Now I'm still dealing with taxes for 2010. My lawyer referred me to someone to help (not a CPA) to do my taxes. The IRS looks down on someone using a CPA as I was told.

Anyway she is telling me that income from my 1099C's cannot be excluded from my taxable income because there wasn't a bankruptcy (which I didn't claim) and that I can't claim insolvency (which I have done on paper. I researched debt settlement all the way through and insolvency was always an option, irregardless of income.

Can anyone who has been through this help me out here and share what they've experienced?

Thanks
Michael

IRS regards the amount forgiven by the creditors in debt settlem

IRS regards the amount forgiven by the creditors in debt settlement as taxable income. It won't be excluded from your taxable income unless you can prove that you are really insolvent. You'll have to submit requisite financial documents to prove that you are insolvent.

To get more information on this issue, you can go through the following page:

"http://www.zipdebt.com/blog/debt-settlement-insolvency"

lrhall41

Submitted by Good Nelly on Thu, 10/13/2011 - 21:37

( Posts: 2846 | Credits: )

Thanks

Thanks Nelly. I filled out the 4681 worksheet to represent the time for each of my settled accounts and I'm insolvent for some but not all. I'm ok with that.
Just the position that I'm not eligible at all because I was working at the time (making a good salary) and I kept my house (although a big mortgage and Heloc) which I did not get too far behind in. I don't think she is accurate there.

lrhall41

Submitted by Michael Stevens on Fri, 10/14/2011 - 03:51

( Posts: 34 | Credits: )