Debt Cancel and IRS
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Posted by Ken (66.217.96.119) on July 01, 2002 at 22:11:59:
In Reply to: Wrong AGAIN - Christine posted by Why Chat on July 01, 2002 at 21:26:17:
Why Chat - I read the IRS regs. It would appear on the face of it, if you pay down any amount owed to the creditor to below $600 you're ok. But this little goodie; "Generally, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your gross income. You have no income from the canceled debt if it is intended as a gift to you. A debt includes any indebtedness for which you are liable or which attaches to property you hold." You can "try" to get the creditor in the settelement letter to make it a "gift", ok stop laughing now. But, it states "indebtedness for which you are liable". What if the creditor cannot prove all the of the debr is owed, ie cannot locate "all" signed receipts? What are your thoughts?
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