When your credit card company cancels the balance in full or in part on your credit card that creates income to you. You need to report the amount on your tax return and pay the tax due. The cancellation of debt on credit cards or most other loans is treated as income. If your credit card company offers a $10,000 discount if you pay the remaining $5,000 on the bill, then that $10,000 is income. Lenders and credit card companies issue a 1099C. A portion of the form goes to the IRS so they are looking to your tax return to see if you reported the income.
If you have more questions please call us at 702-796-1040
No comments:
Post a Comment