Under current Office of the Comptroller of the Currency (OCC) rules, when principal balances on debts are forgiven, the banks must write off the amounts forgiven and report it to the IRS. For debtors, that means they may be hit with the double whammy of a tax burden while they are still trying to pay [...]
Entries Tagged as 'Forgiven Debt'
Old Debt Settlements Can Come Back to Haunt with Large Tax Bite
December 1st, 2008 · 2 Comments · Consumer Debt, Credit Counselor Front Lines, Debt Collection
Q. I settled a debt in 2007 for less than owed, paying $15,000 on a $22,000 debt. I just today received a $7000 1099c for tax year 2007 from the creditor in the mail. Does this actually mean that I have to amend my tax return for 2007?
A. A 1099c is a [...]
Tags: 1099c·Credit Card Companies·Debt Settlement·Forgiven Debt·Insolvency·IRS·Junk Debt Buyers·Taxes
