Re: Debt Cancel and IRS

Posted by Why Chat (209.240.222.130) on July 02, 2002 at 18:20:12:

In Reply to: Re: Debt Cancel and IRS posted by Dan on July 02, 2002 at 17:58:00:

Dan is correct- BK wipes out any obligation to pay tax on the "forgiven" amount. As to owing tax without a 1099C-- that is a question that is in dispute in the IRS court system now--the cases do not involve the kind of debt we discuss here, but the rulings may. The gist of the cases are, if someone loans $$$ and "forgives" a portion of the debt, is it a gift?, taxable income? or if a release is given of "payment in full" can the balance still be considered collectible (for IRS purposes) if assigned or sold to another party.The current cases deal with corporations loaning $$ to ceo's.

Follow Ups:

Post a Followup