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Re: Debt Cancel and IRS


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Posted by Dan (138.88.150.123) on July 02, 2002 at 17:58:00:

In Reply to: Debt Cancel and IRS posted by Ken on July 01, 2002 at 22:11:59:

I think you would have a chance if you could document that the debt was written off because it was in dispute.
One thing to note is that even if you do not get a 1099c, the amount forgiven is still taxable and you are required to report it to the IRS. Most people do not report without the 1099c, but they are supposed to.
The only legal way that I've seen to avoid it is if you are technically insolvent at the time the debts are settled/forgiven. For example if you settle your debts while in chapter 13, you should be exempt from the tax on the forgiven amount.



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