Re: how do charge offs affect my income tax return?

Posted by LadynRed (68.52.127.174) on June 14, 2004 at 08:13:56:

In Reply to: how do charge offs affect my income tax return? posted by paula_ark on June 14, 2004 at 06:31:22:

Charge-offs, in general, do NOT affect your tax returns. However, the settlements will IF the creditor issues a 1099-C "cancellation of debt income". Any amount of $600 in 'forgiven' debt must be reported as income. A charge-off is not 'forgiven', its an accounting function.

You may not have to report 1099-C's as income if you can prove you were insolvent at the time the debt was 'forgiven' and there is a form for figuring insolvency.

Follow Ups:

Post a Followup