NET EQUITY IN ASSETS
The IRS is interested in how much equity you have in assets because some of that equity goes to creating the dollar value for offer purposes.
The IRS for the purpose of this computation is interested in your tangible and intangible assets. Look to the Intangible Assets Section for more information on this issue.
For our purposes here, most intangible assets are worth 100% to the IRS.
Tangible assets include, in most cases, a home, car and boat. Before counting them for offer purposes, 20% is removed from there value so, if you own a home worth $200,000 and have a $160,000 note against it, you have not equity in it for offer purposes.
Again, if you own a car worth $10,000 and owe $8,000 on it, you have no equity for offer purposes. If however, you own a car worth $10,000 and you owe $7,000 on it, you have $1,000 in net equity in assets and that is added to your offer.
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