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Debt Cancellation

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M

majomom1

Senior Member
What is the name of your state (only U.S. law)? MO

I settled a couple of bills with creditors and they have sent me a 1099-C. Under what circumstance would an "exculsion" apply so that I did not have to report this on my taxes?
 


LdiJ

LdiJ

Senior Member
majomom1 said:
What is the name of your state (only U.S. law)? MO

I settled a couple of bills with creditors and they have sent me a 1099-C. Under what circumstance would an "exculsion" apply so that I did not have to report this on my taxes?
Click to expand...
Bankruptcy or insolvency.

To calculate insolvency total all of your debts before the debts were settled, and total all of your assets. If the debts are greater than the assets you are insolvent by the amount that is greater than the assets. That would be the maximum amount of cancelled debt you could exclude from income.
 
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