Do I have to pay taxes on a credit card settlement?
March 29, 2010 by admin
Filed under credit card
I made a settlement with my credit card company and last year i had to pay taxes on it. This year will be the last credit card I settled on…it was less than $3,000 so do I have to pay taxes on that still?
Judy on Mon, 29th Mar 2010 7:08 am
If they show a cancellation of debt, they’ll send you a 1099-C and it will be taxable income.
v b on Mon, 29th Mar 2010 8:09 am
You are better off than the slobs who actually paid the credit card bills, so YES, it’s income.
The IRS will only postpone (not eliminate) the debt if you are either a) in bankruptcy or b) insolvent. Insolvent means showing that even i you sold your total assets at the time, you still couldn’t have paid every body off.
ToYsTeMpTer on Mon, 29th Mar 2010 12:50 pm
if you settled for under the amount you actually owed then yes you will have to claim the difference as income