Monday, July 15, 2019

No good deed....

From our friend Holly R:
Which is a sweet gesture, until one realizes the unintended consequence:

"According to the IRS, if you have canceled, forgiven, or discharged debt for less than the amount you pay, the amount of the canceled debt is taxable income."


Now, the taxes on this difference are, obviously, a lot less than the debt itself, so this isn't a slam on the idea. But if the recipients are unaware of the largess, or of this tax rule, they may be in for a nasty surprise at year's end.

"You get a car, and you get a car..."

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