I own a second home (NOT a RENTAL)and is going to foreclose. I will be receiving a 1099 on the 80,000 difference. Can I consider this as forgiven debt based on insolvency since I cannot afford to pay taxes since my husband is jobless. If so, how does this work. Please advise.
Please see the IRS article linked below, and consult a CPA for specific tax advice based on the facts in your situation.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.