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  • 1.  Discharge of debt

    Bronze Most Valuable Member
    Posted 04-08-2019 06:26 PM
    Hello All

    The end is nearly in sight!

    I have a client who had some Cancellation of Debt income.  They are border line for insolvency.  I am attempting to figure out what must be included as assets.

    Do pension funds count when calculating assets?  Both taxpayer and spouse are under 59 1/2 and therefore cannot withdraw without penalty if that makes any difference.

    Mortgage plus home equity and credit card debt exceeds the value of the home. They have no other significant assets. Cars are leased.

    Bank account balances are minimal. Paycheck to paycheck living.

    Thanks for any feedback.

    Paul

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    Paul Sadej
    CPA
    PAUL J. SADEJ JR., CPA PC
    Bellmore NY
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  • 2.  RE: Discharge of debt

    Posted 04-09-2019 07:51 AM
    pub 4681 has an excellent worksheet for insolvency





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