As far as I know, on a charge-off no. (Since there is always the possibility that they will recoup the charge-off.) When they settle it at a loss (50% settlement offer, etc), then they can 1099 the unpaid amount, there are a number of threads dedicated to setting up a defense to the 1099 being 'income' for your income tax returns.
that's what I need - I can't use BK or insolvency, but i am disputing the difference - I'll search for the threads - thanks
you don't get a 1099 on a charge off because 100% of the debt is written-off by the OC. a settlement is another question because the difference is treated as forgiveness of debt, which is treated as income to you. the OC can choose to send you a 1099 or not, if they send you a 1099 i really don't see what you can do about it. by time you receive it the irs already has there copy. you can take deductions against the 1099 income, such as, attorney fees relating to your credit issues.
The problem with your "defense" is the IRS considers it "income," and thats all that really matters for tax purposes.
I appreciate all the input - I understand about the 1099 in settlement vs CO, (may not agree it's fair, but I get it!) - what I'm mainly trying to find out is are they required to send it - OC says they are required to send one in if over $600 - I'm just trying to find out if that's the case, or if they have some flexibility in what they can do -
Re: Re: 1099 question - Help! I think they are required to give you a 1099 when the forgiven debt is more than $600.
Re: Re: 1099 question - Help! There are several exceptions to this rule. 1. Bankruptcy -if the debt was discharged in Bankruptcy, except it out of income. 2. Continued Insolvency - if, after the discharge, you were still insolvent (meaning you owed more than you owned), except it out. 3. Disputed - If the unpaid portion of debt was disputed, except it out. In each case you should attach documentation to your tax retuirn to explain which section you are using.
