Forgiven Debt Really is Income

There was a pretty good post over at WiseBread yesterday on how if a credit card company forgives some of what you owe, what was forgiven is income you have to pay taxes on. On the one hand, this is a point worth repeating because it seems to surprise most people. On the other hand, the post neglects to mention an important exception, and, moreover, feeds into the belief that this is an irrational fluke of the tax code. It isn’t. It makes sense. You owe Credit Card Corporation (CCC) $5000. [more...]

Date: 2009-09-23 15:59:00

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