insolvent
(1) Special rule for insolvent taxpayers (A) In general The amount of losses to which subsection (a) or (b) applies shall be reduced by the amount (if any) by which the taxpayer is insolvent as of the close of the taxable year. (B) Insolvent For purposes of this paragraph, the term “insolvent” means the excess of liabilities over the fair market value of assets.