A taxpayer foreclosed on a home in TY2018 and was able to exclude $45,000 of qualified principal residence indebtedness on the basis of insolvency. However, they were not able to exclude the rest of the $40,000 due to the loss of the provision specifically allowing it. Due to the changes in TY2020; Which of the following is allowable for the taxpayer?

Select one:

a. The taxpayer can do nothing else but perhaps increase withholding or set up a payment plan for the remainder of the tax liability due to the income inclusion.

b. The taxpayer can take a nonrefundable credit for the tax paid on the leftover $40,000 in additional income by amending their TY2019 return, and carrying the leftover credit into TY2020 and beyond, if necessary.

c. The taxpayer can amend their TY2018 return to exclude the rest or, or change the nature of, the income inclusion to exclude all of it under the retroactive extension of the provision allowing the exclusion of qualified principal residence indebtedness.

d. None of the above.