0
They aren't releasing a lien. they are simply making a required accounting entry to record the bad debt...or actually that the asset they currently have (a receivable from someone), is worthless.
A 1099-C is given by someone who has discharged or forgiven a debt to you. It is reported to the IRS by them on that form. (So your reporting it is telling them something they already know). As this constitutes taxable income to you, you must account for it on your return (and estimated payments before the filing). Further explanation: Lets start with a basic tax concept: If you receive something of value (from someone other than family), you have received a taxable income. (The one giving it rightfully has an expense). For example, remember the Oprah Winfrey thing where the audience got cars� And then found out they owed taxes on the value of the cars. In fact, when Oprah stepped up to pay the tax for them, she had to actually pay more than the tax on the car, (called a gross up), as the money she gave them to pay the tax is also taxable. Hand in hand with that, and the example above, if you get a loan, it is NOT taxable income. The money was exchanged for the equally valued promise to repay. So taking the example above, if a buyer receives the $100 merchandise and gives $100 value for it, obviously nothing income taxable to the buyer. But in this case the buyer receives the $100 of value and say makes a deal in year 2 that if the $100 promise it gave is forgiven for a payment of $75 sent today (frequently offered with words like "because it's all I have and otherwise you ain't getting nothing�."), then the $25 is considered a cancellation of indebtedness. COD income is taxable to the recipient. It isn't a loan/exchange of value anymore, it's a gift of value, and value, as in Oprah is taxable. While no one likes to pay tax, it is the correct outcome. The advantage is the debtor doesn't owe anything anymore, other than tax on the gift. So, simplified again: Receiving money is taxable. Receiving a loan isn't. Receiving a loan, and then saying it wasn't a loan (no repayment), so your just getting money that you don't want to pay taxes on, simply doesn't fly.
Wiki User
∙ 16y ago
Yes, a creditor can refuse to release a lien even after sending a 1099-C for canceled debt. The issuance of a 1099-C does not automatically result in the release of any liens held by the creditor. You may need to negotiate with the creditor or seek legal assistance to address the lien release.
Add your answer:
Earn +20 pts
What is it called if someone sends a letter on your behalf without your knowledge?
If someone sends a letter on your behalf without your knowledge, it can be considered forging your signature or identity theft, depending on the context and intent of the sender. It is important to address such actions promptly to protect your interests and privacy.
How long after foreclosure do you have to vacate in Michigan?
In Michigan, after a foreclosure sale, the new owner typically sends a notice to quit, giving occupants a minimum of six months to vacate the property. If occupants do not leave voluntarily, the new owner can file an eviction lawsuit with the court.
What is a sentence for intervening?
The police officer stopped the fight by intervening and separating the two individuals involved.
What three things happen when a slaves owner sends him to a ludus gladitorius?
The slave undergoes rigorous training in combat and weapons skills to become a gladiator. The slave becomes the property of the lanista or owner of the ludus gladitorius. The slave's life is governed by strict discipline and routines in preparation for fighting in the arena.
List tree things that happen if a slaves owner sends him to a ludus gladitorius?
If a slave is sent to a ludus gladiatorius, they will undergo intense physical training to become a gladiator, they will be subjected to harsh living conditions and strict discipline, and they will be forced to fight in brutal and often deadly gladiatorial games for the entertainment of spectators.
Do you have to file a 1099c for credit card debt that was discharged in chapter 7 bankruptcy?
The debtor does not "file" a 1099C. The debtor may receive a 1099C from the creditor which also sends it to the IRS. The discharge of the debt in bankruptcy nullifies the 1099C. There is a form or a part of the 1040 set for disclosing this information to the IRS.
How does a Sub S corporation pay off a debt that is on the books?
Writes a check and sends it out to the creditor.
What happens when a creditor sends you a summond to go to court for a bad debt that was a bank loan. should i go to court or settle with the crediter?
better to settle with creditor first
If a credit card does a charge-off and sends it to a collection agency can the original creditor still try to collect?
yes
If a creditor sends your payment back to you do you still owe the debt?
Yes. Once a contract has been defaulted on, the creditor has no legal obligation to accept any payment other than that which was agreed on in the original contract or subsequent agreement.
Who sends Hermes to calypso?
Zeus sends Hermes to Calypso to tell her to release Odysseus.
How does an axon release neurostransmitter?
An axon sends signal from dendrites to terminals to release neurotransmitters
If Company A sends your acct to a collection agency but you decide to pay off Company A do you still owe the collection agency money?
Nope. Advise the collection agencey that this was settled with the original creditor. You may have to provide them with a copy of a canceled check or money order. You can also have the creditor call the agency. Some will, some won't.
What happens if you don't pay for a movie subscription that sends to your mailbox and they keep billing me each month and I refuse to pay because I signed up with a giftcard. What will happen?
Free movies!
If a creditor reports false information to the credit bureau and refuses to change it can you sue for malicious libel or is it only for incorrect credit reporting with the FCRA cap of 1000 dollars?
If the creditor reports false information then all you need to do is dipute this with the 3 major credit bureaus, experian, equifax, and trans-union. Screw the creditor b\c if they can't prove it, the bureaus take the information off. Cut them out of the loop entirely, suing them is only going to cost you money. The previous answer is naive. A lot of creditors refuse to correct erroneous information. Many times when the credit bureau contacts the creditor after your dispute, some "law of minimum effort" jerk who gets $8.00 an hour just sends back an e-mail to verify without bothering to do the work. Sometimes they're just plain mean. All a credit bureau can do is report what is given to them by the creditors -- garbage in/garbage out. You can sue them for actual damages, to answer your question.
Zeus sends Hermes to order Calypso to release Odysseus. When Hermes arrives what is Calypso doing?
working on a tapestry
What needs to be included in a bankruptcy letter?
The letter isn't necessary. The clerk sends notices to all on your creditor list.
