Dealing with the Computation of Insolvency

By: Edward K. Zollars, CPA Nichols Patrick CPE, Inc. In the case of Shepherd v. Commissioner, TC Memo 2012-212: Taxpayers who have income from cancellation of indebtedness are allowed to exclude that income for income tax purposes to the extent they are insolvent at the time of discharge, in accordance with IRC §108(a)(1)(B).  In the … Continue reading