Reply
Valued Member
Posts: 51
Registered: ‎08-20-2013

Forgiven debt- IRS tax surprise you've probably never heard of

I have never heard of point #3... You have to pay taxes on forgiven debt!

 

 

 

 

Read more...

 

http://finance.yahoo.com/news/beware-these-5-terrible-tax-surprises-165300601.html

Senior Contributor
Posts: 3,491
Registered: ‎07-25-2008

Re: Forgiven debt- IRS tax surprise you've probably never heard of

I don't believe any of those are new.

 

IIRC, forgiven student loans will generate a tax but the debt cannot carry forward. Have researched it a little bit because of considering the possibility of working for a non-profit and doing IBR the ten years.


Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO


Take the FICO Fitness Challenge
Moderator
Posts: 13,869
Registered: ‎04-15-2011

Re: Forgiven debt- IRS tax surprise you've probably never heard of

If a creditor writes off  your debt and sends you a 1099C, then you have to include that on your taxes.



Starting Score: 504




July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Senior Contributor
Posts: 4,694
Registered: ‎02-23-2011

Re: Forgiven debt- IRS tax surprise you've probably never heard of

If you were insolvent by at least the same amount at the time the debt was given, it's a full deduction.  If you were involvent for part it, the part where you were insolvent would be tax deductible.

Valued Contributor
Posts: 2,982
Registered: ‎02-09-2012

Re: Forgiven debt- IRS tax surprise you've probably never heard of


Shogun wrote:

If a creditor writes off  your debt and sends you a 1099C, then you have to include that on your taxes.


Any time table on how long they have after w/o, to send you that 1099C?

5/2012: 560 credit scores across the board and $500 secured CC
12/2014: 750+ scores across the board and $80k in revolving credit

Get those baddies removed!!!
Epic Contributor
Posts: 22,406
Registered: ‎01-17-2008

Re: Forgiven debt- IRS tax surprise you've probably never heard of


Repo-ed wrote:

Shogun wrote:

If a creditor writes off  your debt and sends you a 1099C, then you have to include that on your taxes.


Any time table on how long they have after w/o, to send you that 1099C?


No, they can send you a 1099-C anytime after they write it off.

 

It just has to be claimed in your taxes the year you recieve it.

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.