Bankruptcy Archives - John R. Dundon II, Enrolled Agent
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Bankruptcy

First off regarding income, do not include a canceled debt in gross income if any of the following situations apply: The cancellation takes place in a bankruptcy case under the U.S. Bankruptcy Code. The cancellation takes place when the debtor is insolvent, and the amount...

You are insolvent when your liabilities exceed the Fair Market Value (FMV) of your assets. It is important to determine your liabilities and the FMV of your assets immediately before the cancellation of debt to determine whether or not you are insolvent and by how much. Exclude...

According to IRS Publication 908, Bankruptcy Tax Guide, generally the automatic stay rules prevent a creditor from taking actions to collect debts incurred before a bankruptcy petition is filed. However automatic stay rules do not universally apply. Exceptions include an IRS exam to determine tax liability,...

This blog is my personal tax research tool. Pursuant to the rules of professional conduct set forth in US Treasury Circular 230 nothing contained in this blog was intended to be used by any taxpayer for the purpose of avoiding penalties that may be imposed by the...

This post is a brief review of IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonment (For Individuals) as it relates to mortgage debt forgiveness. If your debt is reduced or eliminated you normally will receive a year-end statement, IRS Form 1099-C, Cancellation of Debt from your lender. By law,...

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