The IRS, canceled debts?
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Posted by JT on April 11, 2001 at 12:29:03:
I read this at another site: If you have a old debt over 600.00, that debt is considered income if not paid. A creditor can file the loss to the IRS with a 1099-C. What this means for you is that the debt you previously escaped or did not pay back will be considered as part of your earnings and is taxable. What happens exactly? If a creditor sells your debt to a collection agency, is it reported to the IRS as well? Does the creditor have to notify me if they report my debt as a loss? How do you know if a debt has been canceled? Explain this issue to me in plain terms, please.
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