The IRS wants to tax me on 4000 of a 10000 debt I settled for 6000 in 2004. If so, how about I add up my monthly car payments and subtract that from my earned income.
Because that option is not available in the IRS codes.
However, any deduction that you consider legitimate based on your personal interpretation of the code will not be considered a criminal offense as long as your interpretation is not considered willful negligence on your part.
If the IRS interprets your deduction as illegal according to the existing code, you will only be assessed the correct amount as they perceive it.
I am not advocating misinterpretation of the tax code. I am just saying that you have the right to interpret the code to the best of your cognitive ability.
You have the right to be wrong, but you don’t have the right to attempt to willfully defraud.
on Jul 23rd, 2009 at 9:52 am
You could deduct the interest on your home mortgage in schedule A of your return with all you other itemized deductions.
The logic behind taxing ou on cancelled debt is that by settling that debt, it’s as if you had made 4,000.
I know that stinks…
References :
I’m an accountant
on Jul 23rd, 2009 at 9:57 am
Because that option is not available in the IRS codes.
However, any deduction that you consider legitimate based on your personal interpretation of the code will not be considered a criminal offense as long as your interpretation is not considered willful negligence on your part.
If the IRS interprets your deduction as illegal according to the existing code, you will only be assessed the correct amount as they perceive it.
I am not advocating misinterpretation of the tax code. I am just saying that you have the right to interpret the code to the best of your cognitive ability.
You have the right to be wrong, but you don’t have the right to attempt to willfully defraud.
References :