Do Not Ignore IRS Form 1099-C – It Will Not End Well
If those loan servicers know their business, it seems pretty unlikely that Joe was solvent to the extent of over $360,000 after the discharge. I don’t know. Maybe he is a really good negotiator. For the sake of argument let’s assume there is a good argument for insolvency. Joe could have filed his Form 1040 and attached Form 982. Take a look. Check box 1(b) Discharge of indebtedness to the extent insolvent or maybe 1(e) for residence interest. Then in Box 2 go for the gold and write in $364,179. That should appease the computers anyway. And even if it gets looked at, at least there is no failure to file. I’m not going to get into Part II. It only matters if you have tax attributes that you need to reduce.
If you want to be thorough you should got to Publication 4681 and fill out the worksheet on Page 6. Note at the top right-hand corner that it says “Keep for your records”. That means you don’t have to send it in with your return. So you could wait till they ask for it to fill it out. And if they never ask for it, well you saved some time.
Had Joe taken those simple steps, I would put the odds at well over 90% that his return would have sailed through the system.
Tax Court Rules Not Enough Conservation On Golf Course To Justify $10 Million Deduction
Originally published on Forbes.com. These easement cases keep coming. Section 170(h) of the Code has created a mini-tax shelter industry based on bogus conservation...
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.