Is a Form 1099-C Always Required When Settling Disputed Debts? | Nexsen Pruet, PLLC
To embed, copy and paste the code into your website or blog: The potential tax consequences to a debtor and tax reporting obligations of a creditor can become a contentious issue when settling disputed debts, although the issue often arises as an afterthought once the primary settlement terms (amount and timing of payment) have been negotiated. On one side, the debtor does not want its lender to issue a Form 1099-C because the debtor wants to avoid tax liability for imputed income resulting from debt cancellation. On the other side, the lender wants to avoid penalties for failure to file a fo...
Source: jdsupra.com