codename_fortyseven Posted March 12, 2005 Author Report Share Posted March 12, 2005 Ok, folks someone help me out here. Regarding forgiveness of debt and the IRS, suppsoe a CA/OC forgives a debt. The IRS counts it as income and you have to pay taxes on it, correct?Once this happens, unless I am interpreting it wrong, wouldn't the "forgiveness" part preclude seeking the collection of the debt? If someone writes the debt off as a loss and a deduction, they can't double dip and try to collect on it too, right? You can't have it both ways as a deduction and something somone owes you? Link to comment Share on other sites More sharing options...
codename_fortyseven Posted March 12, 2005 Report Share Posted March 12, 2005 Ok, folks someone help me out here. Regarding forgiveness of debt and the IRS, suppsoe a CA/OC forgives a debt. The IRS counts it as income and you have to pay taxes on it, correct?Once this happens, unless I am interpreting it wrong, wouldn't the "forgiveness" part preclude seeking the collection of the debt? If someone writes the debt off as a loss and a deduction, they can't double dip and try to collect on it too, right? You can't have it both ways as a deduction and something somone owes you? Link to comment Share on other sites More sharing options...
peachjuteux Posted March 12, 2005 Report Share Posted March 12, 2005 im curious too...... i read both ways- one board said theycan forgive the debt and send out a 1099 and can still collect the debt amount- another board said they cant --- so im just more confused.. Link to comment Share on other sites More sharing options...
peachjuteux Posted March 12, 2005 Report Share Posted March 12, 2005 im curious too...... i read both ways- one board said theycan forgive the debt and send out a 1099 and can still collect the debt amount- another board said they cant --- so im just more confused.. Link to comment Share on other sites More sharing options...
Methuss Posted March 12, 2005 Report Share Posted March 12, 2005 OK. They don't have to report a forgiven debt unless the forgiven amount exceeds $1200.00. But, once they do report it to the IRS on a 1099, it is done. They have given you a "gift" which amounts to income. Any CA trying to collect the balance would be committing fraud. Just tell them "there is no spoon"...oops wrong venue...There is no debt. Link to comment Share on other sites More sharing options...
Methuss Posted March 12, 2005 Report Share Posted March 12, 2005 OK. They don't have to report a forgiven debt unless the forgiven amount exceeds $1200.00. But, once they do report it to the IRS on a 1099, it is done. They have given you a "gift" which amounts to income. Any CA trying to collect the balance would be committing fraud. Just tell them "there is no spoon"...oops wrong venue...There is no debt. Link to comment Share on other sites More sharing options...
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