Insolvency
Date: Tue, 02/01/2011 - 19:50
It took 3 years before the credit card settled my debt, I went through a debt solution company which I paid almost $9000.00 to have them do this. Now I received a 1099c can I claim the fees I paid to the debt company? and can you claim insolvency on your state taxes as well.
IRS regards the money saved from settlement as taxable income. F
IRS regards the money saved from settlement as taxable income. For example: If you have settled a $15,000 debt for $9000.00, then IRS will regard the $6000.00 (the money saved) as taxable income. In such a situation, you will be sent a 1099c form. As far as I know, you can't claim the fees to the debt solution company. However, you can be eligible for some exemptions due to insolvency. But you have to provide valid documents to prove that.