I have a second home (NOT a rental) which will foreclose. I will get a 1099 from the lender for the 80,000 difference between what I owe and the property will sell for. Can I use insolvency so I do not pay taxes on this? If so, how does this work? Please advise
Please see the IRS article linked below, and consult a CPA or whoever prepares your tax returns for specific tax advice based on your finances --total debts v. the fair market value of your total assets -- and the other relevant facts in your situation. Since you haven't provided that financial information here, no one on Avvo can help you.
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.