401K counted as an asset when calculating insolvency?

[ilzhoefer]

I am waiting for a 1099 form from a short sale that was completed 5 months ago.

A few questions:

1) Will my 401K be counted as an asset in determining insolvency?

2) When do you calculate insolvency, when you receive the 1099 or when the Short sale was completed?

[VirtualCuriosity]

Double check with "IRS 4681", but I think insolvency worksheets lable 401k "interest" under assets.  And other than that, I also think it's at the time of the 1099, but again, just not enough experience for me to claim it is fact.

[DonnyP05]

Yes, your 401K will count as an asset. According to their workbook on it, lots of items count as assets, even life insurance policies. Ill see If I can find the book on it again for you.

[DonnyP05]

Insolvency Guide

Follow that link, it should help you out. Read page 8, it lists what they consider assets to be.

[ilzhoefer]

This is exactly what I needed.

Thank you.

Now if I could only understand it.

My main question is for the Insolvency Worksheet: "Amount owed immediately before Cancellation"

Is that the day before I received the final HUD on the short sale, or the day before I receive the 1099 in the mail, or their cancellation date on the 1099, if they even do that?

Also, can you be insolvent on a rental property or only on the primary residence?

[xracrossx]

http://www.irs.gov/instructions/i1099ac/ar02.html#d0e420 - When is a debt Cancelled?