One quick question about the determination of insolvency in Form 982.
When the taxpayer calculates his total liabilities, can he include the principle amount of the mortgage loan that was canceled?
For example, taxpayer received a Form 1099-C and his mortgage loan $100,000 was canceled on 8-1-2009. On Form 982 , taxpayer has to determine his total liabilities on 8-1-2009. Can he include the mortgage loan $100,000 as part of his total liabilities on that date? Remember that is also the same date that the mortgage loan was canceled.
When the taxpayer calculates his total liabilities, can he include the principle amount of the mortgage loan that was canceled?
For example, taxpayer received a Form 1099-C and his mortgage loan $100,000 was canceled on 8-1-2009. On Form 982 , taxpayer has to determine his total liabilities on 8-1-2009. Can he include the mortgage loan $100,000 as part of his total liabilities on that date? Remember that is also the same date that the mortgage loan was canceled.
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