Question 60 of 75 In which case will the taxpayer be able to

Question 60 of 75. In which case will the taxpayer be able to exclude O Received a Form 1099-C with $17,400 in box 2 O Had a debt of $5,400 cancelled. Immediately O Had $11,500 of debt canceled. Immediately Had a debt of $7,850 cancelled. Immediate

Solution

The Answer is \"C\"

C. Had $11500 of Debt cancelled, Immediately Prior to the cancellation, They were insolvent by $12000.

Because, Cancelled Debt not inclued in income, taxpayer were insolvent immediately before cancellation of debt.