in one question on this form it states settlement in full: accept_______ should i put a amount there then it says discharge of indebtedness of 600$ or more requires filing with the IRS form 1099c
I am not entirely sure of this one since I have never filled one of these out. Do not put anything until someone comes on here and answers you question. I do know that if they write the debt off they will some times report it to the IRS and you will have to pay taxes on it because if you do not pay the debt then it is considered an income. Do not be surprised if you have to pay taxes on it.
Hi Tressa
As far as I know, IRS 1099c form is filed when there is foreclosure on your property and you do not pay a part of the outstanding debt amount. When your property is sold by the mortgage lenders due to foreclosure, they may not get the full value of the outstanding debt by selling the property and so they have to sell it incurring a loss. Therefore the borrower still owes some money to the creditor which the lender may write off. In such cases you need to pay the tax on the amount which you did not repay. For this you need to file IRS form 1099c. Generally if your debt has been forgiven by your creditor for $600 and above, the creditor must provide you with this form.
Yes, since your exempted debt amount has been over 600$, you need to fill up the 1099c form. Now in the form 1099c, I cannot find anything like "settlement in full" as you said. Are you taking about any other form or you faced the problem with the 1099c form. If it is any other form you are talking about, you need to put the outstanding debt amount ie $6550 and not $600.
Now I do believe that you will be responsible for the taxes on the amount you list. If it is $6550, the amount of the debt, then you will more than likely be responsible for the taxes on this amount. They look at this as a type of income if you do nopt pay the debt. Thats roughly $393.
Hi tressa_burns
Is your property under foreclosure? If it is under foreclosure and you cannot pay off the difference in the amount that you owe and the amount at which your property has been sold off by the creditor, you need to file form 1099c and you need to pay tax on this difference in amount.
So what is the taxes paid on the settlemnt amount or the full amount owed? Unless I am missing it I do not see anything about the property foreclosure. Can you explain how this is?
The tax is on the outstanding debt i.e, the difference in the price your property has been sold and your outstanding debt on the mortgage. The tax is neither on the settlement amount, nor on the full amount, but on the amount which you do not pay back to the creditor. Moreover, you need to file 1099c only if the amount which you fail to pay back exceed $600.
I am not entirely sure of this one since I have never filled one of these out. Do not put anything until someone comes on here and answers you question. I do know that if they write the debt off they will some times report it to the IRS and you will have to pay taxes on it because if you do not pay the debt then it is considered an income. Do not be surprised if you have to pay taxes on it.
Hi Tressa
As far as I know, IRS 1099c form is filed when there is foreclosure on your property and you do not pay a part of the outstanding debt amount. When your property is sold by the mortgage lenders due to foreclosure, they may not get the full value of the outstanding debt by selling the property and so they have to sell it incurring a loss. Therefore the borrower still owes some money to the creditor which the lender may write off. In such cases you need to pay the tax on the amount which you did not repay. For this you need to file IRS form 1099c. Generally if your debt has been forgiven by your creditor for $600 and above, the creditor must provide you with this form.
Yes, since your exempted debt amount has been over 600$, you need to fill up the 1099c form. Now in the form 1099c, I cannot find anything like "settlement in full" as you said. Are you taking about any other form or you faced the problem with the 1099c form. If it is any other form you are talking about, you need to put the outstanding debt amount ie $6550 and not $600.
Now I do believe that you will be responsible for the taxes on the amount you list. If it is $6550, the amount of the debt, then you will more than likely be responsible for the taxes on this amount. They look at this as a type of income if you do nopt pay the debt. Thats roughly $393.
Hi tressa_burns
Is your property under foreclosure? If it is under foreclosure and you cannot pay off the difference in the amount that you owe and the amount at which your property has been sold off by the creditor, you need to file form 1099c and you need to pay tax on this difference in amount.
So what is the taxes paid on the settlemnt amount or the full amount owed? Unless I am missing it I do not see anything about the property foreclosure. Can you explain how this is?
The tax is on the outstanding debt i.e, the difference in the price your property has been sold and your outstanding debt on the mortgage. The tax is neither on the settlement amount, nor on the full amount, but on the amount which you do not pay back to the creditor. Moreover, you need to file 1099c only if the amount which you fail to pay back exceed $600.
Thanks for expalining. I understand now. If you owe under 600..no form then right?
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2ET1Zf Thank you ever so for you blog article.Really looking forward to read more. Will read on...