Debt Settlement Tax Laws

[Lighunt]

What is the name of your state (only U.S. law)? PA

I recently received settlement offers from two credit card companies that had gone to collections, which I accepted. I understand that I will need to pay taxes on the "Taxable Income" from the amounts that were not settled. Are there restrictions to what the credit card companies can report? Would my tax liability be restricted to the extent of my original charges on the credit cards or would it also include late fees, charges, and court costs, etc?What is the name of your state (only U.S. law)?

 

[ecmst12]

I believe they are supposed to send you a 1099 showing the amount that was forgiven.

 

[Lighunt]

I am aware that they need to send me a 1099 for the amount that was forgiven. I am just trying find out if there are restrictions on what they are able to claim as a forgiven amount.

 

[Country Living]

You may have a better chance of getting a tax answer in the tax forum. Copy your question, close (lock) this post, and put it in the tax forum.

If you don't close this post (or delete it), you may get some comments about duplicate postings.