when would it be appropriate to account for a debt as a debt extinguishment?

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when would it be appropriate to account for a debt as a debt extinguishment?

2007-02-28 06:01:32 · 3 answers · asked by Eileen B 1 in Business & Finance ➔ Taxes ➔ United States

3 answers

Depends. If you're a creditor and want to take a deduction for a bad debt, you can take it as soon as the debt is uncollectible. When it becomes uncollectible is generally left up to you to determine.

2007-02-28 06:18:29 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋

If you get a release from the creditor waiving any further obligation on the debt, or,alternatively, after the limitation period for an action on a matured debt has passed (the so-called statute of limitations, typically 6 years on a matured debt).

2007-02-28 06:04:44 · answer #2 · answered by Anonymous · 0⤊ 1⤋

Depends on the debtee.
Typically 7-10 years.

2007-02-28 06:04:15 · answer #3 · answered by Barrett G 6 · 0⤊ 1⤋