Paying taxes on Ch. 7 discharged debts

[mountanddo]

Yeah, H&R Block messed up my taxes once. Didn't know how to do an NOL (Net Operating Loss) carryback. The excuse was that business taxes were done from a different office and that I should go to that office in the future!

Oh well.

From someone that had to do a NOL, it's not that hard to do. Trust me I hadn't done more than a 1040EZ before I had to do it. It's good to know there might be an industry I could work in should I get fired like everyone else has at my company!

[BankruptinNJ]

Intererestingly, I just heard Clark Howard say that if you settle with a collection agency for pennies on a dollar and the amount owed is more than $600, they will send you a 1099 and you will have to pay taxes on the amount you didn't pay!

[jacko]

I know which you mean.. ROF!

It's like going to Great Clips for a haircut. They know the basics but don't have them do anything difficult or you might be living with it for awhile.

[gunnagtthr]

wow, bk in NJ! That is something they never tell! I have never heard that before, yet I fully believe it.

[drowning123]

You only receive 1099s if you settle debts. You pay tax on the forgiven amount. Let's say you owe 500, and you settle for 200. You have to pay taxes on 300.