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Credit card debt write off and taxes
I closed a failing business last year, the business owed debt to CC companies who wrote the debt off. I am filing my 2009 business taxes and would like to know what form would I add this debt write off on? It is my understanding that the write off is considered income and needs to be indicated as such on my return. Any insight would be helpful.
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Unless it was settled, you will not get a 1099c. You still owe the debt even though it has been written off. You do not ask the credit card company to send you a 1099c. They may not pursue it further although they probably will. Until you settle and the liability is released, there is no recognition of income. Check with a tax professional on the effect both ways. If you were insolvent when the debt was forgiven, it may not have much effect.
James Montgomery http://jamesmontgomerylaw.com/credit-card-debt-settlement |
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