Settlement?
Date: Sun, 08/09/2009 - 20:51
I do not understand something I heard, if you settle you pay taxes on what? If I owed $100 and it became $344 and then I 'settle' for $200, where does IRS come in? :cry: :shock:
Hi Baker If you settle your debts for less, you have to pay tax
Hi Baker
If you settle your debts for less, you have to pay taxes on the exempted amount, only if that amount exceeds $600. This is because it will be considered a part of your income. However, since in your case, the exempted amount is only $144, you need not pay the tax.
