Tax Payer had a forclosure in 2014 and received a 1099-C for each taxpayer and spouse. So now they have a gigantic tax bill.
Tax Professional Answers
Barring any exception, you have borrowed money and not repaid it, the IRS says that's taxable income. But you aren't paying back dollar for dollar. If you are in the 25% bracket you are only being taxed 25 cents for each $1 of cancelled debt.
Meet Leading Tax Advisors
Federal Tax Credits & Incentives Practice Leader
New York, NY
CEO/Certified Financial Advisor
Rancho Santa Fe, CA
San Jose, CA
Long Beach/ Park City, CA