When canceled debt is jointly held by both spouses:

A. Each spouse will be responsible for one-half of the canceled debt, and they will each complete a Insolvency Worksheet with all of their separate liabilities and assets only.

B. They may choose to file married filing separately, as this may provide a greater reduction of canceled debt income.

C. A single Insolvency Worksheet can be completed showing all of their liabilities and assets.

D. Each spouse will be responsible for one-half of the canceled debt, and they will each complete a Insolvency Worksheet with one-half of their joint liabilities and assets.