Insolvency

[hanjenden]

What is the name of your state? AK

When filing a joint return, can one spouse claim insolvency in regard to forgiven debt without the joint filer also claiming insolvency? Also, if we both claim insolvency, what happens to our tax deductions? My husband has a rental property that he plans on selling later this year. Thanks

 

[hanjenden]

Can anyone be of any help with this?

 

[hanjenden]

Is there anyone out there who knows anything about this?

 

[Snipes5]

That depends on whose debt it is. Claiming insolvency is also a bit complicated. It is helpful if the potentially insolvent person is in bankruptcy.

Snipes

 

[hanjenden]

It was my debt, not my husbands. I settled with two of my creditors in order to avoid bankruptcy. My husbands name was in no way connected to the debt. Thanks for the response.

 

[Snipes5]

In that case it would probably be in your best interest to file "Married Filing Separately" on the return which includes the debt cancellation.

I'm hoping your husband's name isn't listed on the cancellation documents. If it is, it's joint income.

Snipes

 

[hanjenden]

No, his name is not on the camcelled debt. Thank you so much for your help.