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Tempe AZ 85282
You do not include canceled debt in your income to the extent you are insolvent immediately before the cancellation. Insolvent immediately before the cancellation means: your liabilities exceed the FMV of your assets the day before the cancellation.
IMPORTANT ADVICE: Keeping your Records for this worksheet could prove to be important. Print out & include any proof for the FMV of your assets (what you use to determine FMV) and the balances of your liabilities (Examples include: bank statements, online values, appraisals, balance sheets, etc.). You never know when the IRS is going to ask you to PROVE IT!!!
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