Interest on student loans - Tax ?ions
Date: Sun, 11/01/2009 - 20:02
I recently paid off Private student loan that was in default. Original balance was $4,000 which ballooned to $10,500. The CA (Collection Agency) the loan was assigned to accepted a lump sum of $8000 to settle the debt. I was wondering if I am now entitled to take a tax credit for the interest and fees ($4,000) for my federal tax return. If so, how much can I claim per year (does it roll over) and are the tax documents automatically sent to me by the CA, or do I need to request from CA and/or the original lender? Thanks in advance!
You may find the following IRS link useful. "http://www.irs.gov
You may find the following IRS link useful.
"http://www.irs.gov/publications/p970/ch04.html"
The lender will send you the interest statement. You will also
The lender will send you the interest statement. You will also receive a 1099 for the amount that they wrote off....which is probably a lot of interest. You will end up paying taxes on the settled portion.