Taxed on settlement credit card
Date: Fri, 02/11/2011 - 01:52
I have settled with Midland Funding, LLC and I received a letter from the IRS stating I owed them money due to this settlement. If I can't claim the high interest they charged how come they think this is a capital gain?
While you settled your debts with MIdland Funding, they actually
While you settled your debts with MIdland Funding, they actually forgave a portion of your debt. They may have settled the debts for 40% - 60% of what you owed to them. This forgiven debt is considered as your income by the IRS and thus you're liable for paying the taxes.
