My property has lost over 50% of its value since the economic down turn. Does the IRS allow any tax breaks for this?

I “settled” with several credit companies for over $40,000 in debt. The IRS considers the settlement amount as earned income unless the tax payer was “insolvent” at the time of the settlement. My home has minimal equity but I don’t know how to determine the value the IRS will use in calculating my debt to income ratio. It could make a big difference in my tax liability for the past year but was better than filing for bankruptcy or losing my home. This question even

Debt vs. Equity. Market Capitalization, Asset Value, and Enterprise Value.