How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Taxtom Your Own Question
Taxtom
Taxtom, Accountant
Category: Finance
Satisfied Customers: 2364
Experience:  25 Years in preparing Personal and Business Tax Retuns
21049508
Type Your Finance Question Here...
Taxtom is online now
A new question is answered every 9 seconds

We experienced a serious financial hardship over that last

Resolved Question:

We experienced a serious financial hardship over that last two years due to a DUI and wreck. Many of our credit card companies settled our debt for less than what is owed. I know that we need to report this as income if we can not show insolvency at the time of the settlement. I have a question on one account that shows on our credit report as written off as a bad debt for 20856. They never contacted us they just wrote it off as a bad debt. Do we include this as a taxable amount? They have not sent a 1099.
Submitted: 5 years ago.
Category: Finance
Expert:  Taxtom replied 5 years ago.

Taxtom :

Hello, Just report the income from the 1099C's you received from the lenders. If you later receive another 1099C from the last account then you can always amend your tax return. Although it is shown as written off they have in effect sold the debt to a third party and someone will contact you about the debt in the future. Since that debt is not considered as forgiven it is not income to you yet. Thanks Tom Please click accept.

Taxtom and other Finance Specialists are ready to help you