03-31-2012 03:45 PM
So, I paid my guys Car repo off. I paid off the full amount of the charge off I did not take just pay this amount.
He said last year he had to pay taxes on the amount that was written off. I know for a fact nothing was written and the full car loan was paid off.
I didn't know he paid it and second I paid the amount.
Is this legal and what should or who should i contact about this?
I didn't know until now about this, When the loan was paid off they sent me the title of the car.
04-01-2012 09:42 AM
My guy had a car......he fell behind 1 month on the payment. Chryseler put the car into repo mode because of the late fee never paid. I in turn called chryselor and paid the entire 12,000 loan off. I did not do it for a lesser amount ie. 20% of loan amount. They said I can take a reduction but it would said PAID but with lesser charge off amount.
I chose to pay the entire amount so the CR would reflect this repo-paid in full.
I thought if you do not pay the entire amount due, one would have to pay taxes on the unpaid loss.
There was no unpaid loss, I paid the entire loan, so no taxes should of been paid on the repo. This is what I assume.
Hope this helps
04-01-2012 06:15 PM
Yes, if you paid in full, there should be no tax implications. Are you saying that he was charged tax by the IRS? If so, the OC should have sent him a 1099-C showing the forgiven amount. Did he get one of those? If so, I would start by contacting the OC and if necessary, the IRS.
04-02-2012 08:01 AM
Probably the 1099-C crossed paths with the payment in full. He needs to contact the IRS and show proof it was paid in full (e.g. last statement, CR balance amount, or anything that shows the full balance from the creditor) and include a copy of the payment (e.g. check copy, payoff letter). The IRS will then void out the 1099-C and return the taxes.