If I settle 30,000 thousand dollars in credit car

If I settle 30,000 thousand dollars in credit card debts with a payment of 8,241.08 will i be taxed on the remaining 21,000 dollars in forgiven debt?? what is the tax rate if i do??

2 Answers

You can evade the tax by proving that you are insolvent.


Yes, you would have to include a 1099c when you file your taxes. The rate of taxation for forgiven debts is the same as your income tax rate simply because forgiven debts are considered to be income by the IRS.


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