So I had a large debt of mine discharged. Yay! I put the 1099-C into TurboTax, and nearly crapped myself when I saw I now owed over $13,000 in taxes!

Thankfully, there's Form 982 to the rescue; this will determine up to what amount I am considered insolvent, and will affect the amount of this discharged loan that I need to pay taxes on. Of course, I don't want to pay a dollar more than necessary, so I have the following question:

How do joint bank accounts count towards my assets for the purpose of this insolvency calculation?

Additional info: The tax return is being filed jointly, but the debt was entirely mine. The instructions for Form 982 state to "include all assets, even those which would otherwise be exempt from collections".

1 Answer 1


This is a legal/tax question and you should ask a licensed tax adviser (EA/CPA licensed in your state) for a proper response.

In general, you should write there all your assets, i.e.: assets that belong to you. In a community state, that would include half of your spouse's earned income, for example.

Assets otherwise exempt from collections also include your pensions and retirement accounts, personal property, cars, collections, etc. You can find a detailed example in the IRS publication 4681.

I strongly suggest not to file form 982 without a proper tax counsel by a licensed professional.

  • I live in New York, which is not a community property state. When filling out Form 982, I counted all of my personal assets, and half the value of our joint assets.
    – Bigbio2002
    Feb 25, 2014 at 21:41

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