Facing a tax bill on cancelled debt? There is a way out

[smkrishna]

I just came across this website link when I was seraching for "form 982 insolvency worksheet" to avoid 1099-C Cancelled Debt income reported to IRS.

http://www.marketwatch.com/story/facing-a-tax-bill-cancelled-debt

I have very little credit card debt and was scared to negotiate with collection agencies for HELOC loan that I took on one of my investment home. Apart from that, I was worried about 1099-C that I have to pay if I get this from my lender.
I have 2 investment properties foreclosed on my name. It looks like if you can prove that you are insolvent without going for the option of BK (if you dont have huge debts), then form 982 seems to the best option.

Any opinion on this?

[nc73]

Yes it's well known. I say go for it.