In Which Year Will I Have to Deal w/ The Taxes?
Date: Fri, 01/21/2011 - 09:20
Hello. I recently entered into a settlement with Bank of America. 4 payments are being made to settle the account. I made the first payment in December and the last three will be made in 2011.
Do i have to deal with the tax consequences in 2010 since i entered into the agreement at that time, or will it be in 2011 when final payments are made?
Please advise.
Thanks!!!
Do i have to deal with the tax consequences in 2010 since i entered into the agreement at that time, or will it be in 2011 when final payments are made?
Please advise.
Thanks!!!
Since the last payment will be made in 2011, the taxable event w
Since the last payment will be made in 2011, the taxable event would be for 2011. Bank of America will send you a form early in 2012. However, if you can prove insolvency at the time you might not have to pay any taxes on the forgiven portion. Go to www.irs.gov and check requirements.
