A loan where missed payments are added to the loan balance in örder to bhing the

Question

A loan where missed payments are added to the loan balance in örder to bhing the paymernts cuinet Mark for follow up Question 59 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 in box 2 and $16,700 in box 7, and they were insolvent by $2,900 O 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. OF

Explanation / Answer

The Answer is "C"

C . A taxpayer had $12500 of debt canceled, Prior to the cancellation, they were insolvent by $13000.

The Taxpayer were insolvent immediately before the cancellation of debt that Cancelled dabt is not included in

income to the extent.

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