This financial instution has been trying to get us to pay for something that I thought we had paid up. We were never contacted until 3 or 4 yrs later, after this place of business either got sold or changed hands. The place called us sereval times to get their money. I told them that the bill was paid. This instution was a loan company. I told them I wanted a bill or a copy of everything that we paid. They never sent it. They called again about 6 months later and I repeated myself again about I wanted a copy of what we had paid. Now they have sent me this thing for the IRS. Something about section 6050P of the IRS code requires that they report the discharge of any debt over $600. Are they going to hijack my taxes or what
2006-12-06 05:42:47 · 4 answers · asked by Julie S 1 in Business & Finance ➔ Taxes ➔ United States
If you're absolutely sure you paid off the balance in full, try to find proof and submit to the IRS, either separately or with your return.
Reporting a discharged debt is no big deal. Any debt that has been discounted by $600 or more must be included in your income (AGI). But by the time you minus standard or itemized deductions to reach your taxable income, you might not even notice it at all. Depending of course how much over the $600 they forgave and your actual income.
Don't sweat it.
2006-12-07 05:34:29 · answer #1 · answered by Celeste 6 · 0⤊ 0⤋
No, you're not in trouble with the IRS, but you'll have to pay income taxes on the amount discharged. If you're sure you already paid it, go back through your records and try to find proof.
2006-12-06 05:53:03 · answer #2 · answered by Judy 7 · 2⤊ 0⤋
You'll just have to pay taxes on the $600, which should be next to nothing. The good part is the matter is considered "closed" and they cannot bother you any more about the debt.
2006-12-06 06:52:51 · answer #3 · answered by Kevin K 3 · 1⤊ 0⤋
Get IRS publication 908 and Form 982. Have someone help you fill it out.
2006-12-06 07:02:57 · answer #4 · answered by woodluvto 2 · 1⤊ 0⤋