What does this mean about taxes then?
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Posted by Brandon
(204.120.48.3) on April 14, 2002 at 14:23:44:
This article appeared in the detroit news on 02-08-2001. Author Mellisa Preddy "Charge-offs, and resulting income tax liability, happen in two ways. In some cases, the borrower simply stops making payments and fades out of site. After 6 months elapses, the lender writes off the balance as a bad debt and files a 1099-c form with the IRS, reporting that amount as income to the account holder. The borrower will receive a copy of the 1099-c in the mail during tax filing season the following year, he or she must declare the amount as income when filing."
Article also stated that it part of the law that they do it that way. My question don't they write it off because of the tax break that they get? Why would they send the IRS another 1099-c if you settled 5 years after last payment According to her article there supposed to send it in 6 months after they charged it off. Can you please explain.. You can find the whole article if you go to yahoo.com
search engine and type in, "failing to pay debts stings taxes." It immediately shows the link to read this article.. here's the page but it won't open. http://detnews.com/2001/business/0102/19/b03-189475.htm thanks for your help..
brandon
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