This document is a worksheet used to calculate if someone is "insolvent." In simple terms, insolvency means you owe more money than you own.
Here is how the math works based on the form:
1.
Part I (Liabilities): You add up all the debts listed in lines 1 through 14. This gives you the
Total Liabilities.
2.
Part II (Assets): You add up the value of everything you own listed in lines 16 through 36. This gives you the
Total Assets (specifically the Fair Market Value).
3.
Part III (Insolvency): You subtract your Total Assets from your Total Liabilities.
The formula for the final answer (Line 38) is:
Total Liabilities (Line 15) – Total Assets (Line 37) = Amount of Insolvency (Line 38)
* If the number is positive, that is the amount you are insolvent by.
* If the number is zero or negative, you are not insolvent (you enter 0).
Since there are no specific dollar amounts provided in the image to calculate, the solution is the method described above.
Final Answer:
To solve this worksheet, sum lines 1–15 to get Total Liabilities, sum lines 16–37 to get Total Assets, and subtract Total Assets from Total Liabilities to find the Amount of Insolvency on line 38.
Parent Tip: Review the logic above to help your child master the concept of cancellation of debt insolvency worksheet.
