Settlement and taxes
Date: Mon, 10/24/2005 - 08:51
Ok I know a CA can offer to settle an account with you. I also know there is a provision that allows them to report it to the IRS as income for you. What I dont know, is that determined by a percentage or a monetary value?? (i.e if you save 60% or $400 dorllars or more)? does any one know hat Im getting at here?
Clay, the income shown in the IRS as debt reduction is shown in
Clay, the income shown in the IRS as debt reduction is shown in the monetary value. All the deductions will be separated from your AGI to reach your taxable income.
Regards
Roxette
Could one make a agreement in which they DON'T report it as part
Could one make a agreement in which they DON'T report it as part of the settlement?
To further clarify, if I have a debt worth $276.00, and I settle it for say $139.00, is the difference taxable? or is it not enought to qualify as taxable income?
Calculate the AGI including this difference. If it is below the
Calculate the AGI including this difference. If it is below the taxable amount, you won't have to pay tax on it.
Quote:
Could one make a agreement in which they DON'T report it as part of the settlement? |
The figure has to be itemized before filing your income tax.