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Recently I read an article, a CA and OC write off a debt on their taxes, and subsequently its sold to another CA and they write if off as well. If I pay it or don't pay it the IRS may consider this income for me, or additional income for the CA's and OC. So if two business's write off a debt, can they legally pursue me for it? And who has to give who the 1099-c?
http://www.nolo.com/legal-encyclopedia/tax-consequences-settled-forgiven-debt-29792.html
@Anonymous wrote:Recently I read an article, a CA and OC write off a debt on their taxes, and subsequently its sold to another CA and they write if off as well. If I pay it or don't pay it the IRS may consider this income for me, or additional income for the CA's and OC. So if two business's write off a debt, can they legally pursue me for it? And who has to give who the 1099-c?
http://www.nolo.com/legal-encyclopedia/tax-consequences-settled-forgiven-debt-29792.html
I think that for it to be considered income for you, it has to be forgiven. When they write it off as uncollectable, they are not forgiving your debt, just saying that they have determined they cannot collect this debt and write off whatever costs they incurred to get it. However, when they forgive it, they are saying that you no longer owe it, then that could be considered income to you. If it is forgiven, they can no longer come after you for it, or sell it to anyone else to do so.
But part of the question is that if they have written it off already can they still collect it, much less put it on my credit?
What are mine and their tax liabilty if they have written it off, can I claim it on my taxes as a medical expense if they wrote it off and I paid it?
@Anonymous wrote:But part of the question is that if they have written it off already can they still collect it, much less put it on my credit?
What are mine and their tax liabilty if they have written it off, can I claim it on my taxes as a medical expense if they wrote it off and I paid it?
What you claim on your taxes has nothing to do with what they claim, so you need not worry about how they notate it for your own taxes. If you paid it, you can write it off as a medical expense, period.
As for them, by writing it off, they at one point decided it was uncollectable. When you eventually paid it, they should have reported that to the IRS as revenue. That is independent of your credit tradeline though, which will remain "Charged off"