Tax
Jul. 21, 2017
It’s great when debt is forgiven, but don’t forget about taxes
If someone forgives your debt so you do not have to pay back the lender, isn’t that always a good thing? Yes, but generally not when it comes to taxes.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
If someone forgives your debt so you do not have to pay back the lender, isn't that always a good thing? Yes, but generally not when it comes to taxes. The issue can arise in your personal life, or in your business or professional life. The unhappy tax result is generally the same.
When a debt is forgiven or cancelled, the IRS and the California Franchise Tax Board generally view the loan money as income ...
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