Posts Tagged ‘canceled debts’
Bad Debts Gone Wild: Part III, Business Debt
May 10th, 2010 | 
Author: 
Business failure can leave you feeling totally de-railed
In the last part of this series, we covered the consumer side of bad debt charge-offs and how the IRS handles that from a tax perspective. Today I want to delve into the business side of bad debt charge-offs. This side of things is usually quite complex and hard to generalize but I will attempt to keep my “tax guru” side in check and you on board. Read the rest of this entry »
Posted in Business Finance, taxes | 
Tags: 1099-C, accounting, business assets, canceled debts, discharged debt, net worth, ordinary business loss, recession, small business, tax, taxable income, taxes | 
4 Comments »
1099-C & 1099-A: Bad Debts Gone Wild – Part I
The bleak economic environment over the past couple of years has resulted in a wave of credit defaults & foreclosures striking many individuals and small companies. In addition to dealing with stress and damaged credit scores, there is something even more sinister lurking in the shadows waiting to attack unsuspecting debtors…good ol’ Uncle Sam.
At first, it may not make sense that the IRS would be concerned with a debtor’s written off debt. But the tax code is quite clear in stating that (under many circumstances) discharged debt is considered taxable income. This fact may leave you scratching your head and saying to yourself, “What?!? If I don’t have the money to pay off my debts, then how can I pay income taxes on my discharged debt? It makes no sense to me!”
Posted in taxes |
Tags: 1099-A, 1099-C, bad debt, canceled debts, discharged debt, tax code, tax law, tax return, taxable income, taxes |
2 Comments »
So You Thought Your Home Foreclosure Was the End of Your Troubles, Huh? ( Part 2)
Last week we talked about homeowner cancellation of debt tax issues. This week we’re going to talk about another tax consequence related specifically to home foreclosures. Did you know that the tax code treats losing a home to foreclosure as a sale and may result in a taxable gain or loss? (Yes, I am beginning to feel I should recant my statement from last week that Government isn’t entirely heartless.)
Foreclosure may seem like the end of the road, but wait! There's more!
So You Thought Your Home Foreclosure Was the End of Your Troubles, Huh? ( Part 1)
With unemployment rates Nationwide reaching 9.7% in June 2009, and here in Tampa bay area topping the charts this month at 10.4%, in combination with a dismal housing market many homeowners are facing the grim reality of being stuck between the proverbial rock and a hard place; sell at a loss or default on your loan. Unfortunately, even in these situations there are tax issues that can haunt you down the road…just when you think you’ve gotten through the toughest part of your ordeal.
Obviously this isn’t going to be the sunniest blog I’ve posted, but my hope is that readers can use the knowledge I’m sharing to empower themselves; an important step toward starting the financial and emotional recovery process.