Forgiven Debts which are Non-Taxable
There are forgiven debts which are exempt from 1099 reporting.
One of these is debt canceled in a bankruptcy filed under Chapter 11.
This is a form of bankruptcy involving a reorganization of a debtor’s business...
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Forgiven Debts which are Non-Taxable
There are forgiven debts which are exempt from 1099 reporting.
One of these is debt canceled in a bankruptcy filed under Chapter 11.
This is a form of bankruptcy involving a reorganization of a debtor’s business affairs and assets.
Although it can be filed by individuals,
it is usually resorted to by corporations.
Debts that are discharged in this bankruptcy are not taxable.
It also takes precedence over
other exclusions.
What’s more, no dollar limitations exist on the amount you can exclude under Chapter 11.
The Mortgage Forgiveness Debt Relief Act which was enacted in 2007 exempts income from the discharge of debt in your own home.
Debt that is forgiven because of foreclosure and mortgage restructuring are not taxable anymore.
The coverage of this relief applies to
forgiven debts of up to $2 million from 2007 to 2012.
Note that the Mortgage Forgiveness Debt Relief Act applies only to debt or
refinance debt used for the purchase, construc
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