l 13 bxempt from income) for recent ullder the Home Affordable Modification prog

Question

l 13 bxempt from income) for recent ullder the Home Affordable Modification program. rted urban areas nt graduates of medical and dental school who agre Mark for follow up Question 58 of 75. In which case will the taxpayer be able to exclude all income from their canceled debt? O The taxpayer received a Form 1099-C with $18,400 n box 2 and $16,700iband they were insolvent by $2.800 0 A taxpayer had a debt of $5,400 canceled. Prior to the debt, they were insolvent by $2.750. O A taxpayer had $12,500 of debt canceled. Prior to the cancellation, they were insolvent by $13,000 O A taxpayer had a debt of $8,750 canceled. Prior to the debt, they were insolvent by $7.500. Mark for follow up Question 59 of 75 You must file a Form 1099-C if you cancel a debt ofor more, assuming you meet all of the other requirem o $100

Explanation / Answer

Answer :

Option : 3

i.e. A taxpayer had $12,500 of debt canceled. Prior to the cancellation, they were insolvent by $13,000.

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