A taxpayer foreclosed on a home in TY2022 and was able to exclude $45,000 of qualified principal residence indebtedness on the basis of insolvency. However, they were not able to exclude the rest of the $40,000 due to contradictory financial records and adverse reporting from the lender. After the records are cleared up so that the taxpayer can prove insolvency for the whole amount, what can they do for TY2023?

Answer rating: 100% (QA)

The taxpayer can exclude the entire 85000 of qualified principal residence indebtedness for tax ... View the full answer