debt: Is Cancellation of Debt Always Income Taxable?
- 04/19/08 05:36 PM
Is Cancellation of Debt Always Income Taxable? What does IRS say? Not always. There are exceptions. Some situations when cancellation of debt income is not taxable involve:A. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. B. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Insolvency is complex to determine and the assistance of a tax professional is recommended for consideration. C. Certain farm debts: If you incurred the debt … (0 comments)
Is Cancellation of Debt Always Income Taxable? What does IRS say? Not always. There are exceptions. Some situations when cancellation of debt income is not taxable involve:A. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. B. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Insolvency is complex to determine and the assistance of a tax professional is recommended for consideration. C. Certain farm debts: If you incurred the debt … (0 comments)
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