Zombie dead what is zombie dead basically zombie debt is debt that has been written off or discharged or eliminated but because it's been transferred from collection agency to collection agency to collection agency to collection agency borrowers still get calls trying to collect on that debt it can be debt that was discharged in a bankruptcy it can be debt that was settled it can be 10 it can be debt from a waiver of deficiency from a short-sale it's pretty much any type of debt that starts to get passed from debt collector to debt collector to debt collector and even though the borrower owes no obligation to repay that debt they still get calls on that debt one thing that some people would bring up immediately is wait a minute so let's say in the situation of a mortgage foreclosure a 1099 C is issued forgiveness of debt income is issued that debt is gone right the answer is no that that is not gone what the IRS says is that the 1099 C is merely a reporting tool that the bank issues to the borrower and the IRS to say that it is forgiveness of debt income the 1099 C in and of itself is not a satisfaction a waiver a release it is none of those things it is merely a reporting tool.
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Zombie debt 1099 c Form: What You Should Know
In the latter case, it is important that the IRS contact the business' customers so that they can be informed of the cancellation and the reason for the cancellation. If you receive a cancellation of a debt due to noncompliance, you should review the cancellation form carefully to determine if you owe tax. If you owe tax, you should consult an accountant or lawyer to review your options before contacting the creditor. If You Are a Business Your business may receive an IRS 1099-C when customers pay on delinquent debt for which the business is liable. Creditors may cancel and reduce the debt if you make payments on your delinquent debts in your capacity as the business. However, if you are acting as a business, you will be required to withhold and remit any delinquent payments on account of the business. To the extent that the business receives the 1099-C, the business will need to file a Form 1099-MISC. If this is the first time you have received one of these forms, there are a few important points that you should know: The 1099-C is for a debt you are liable for on account of a business you control. The amount reported generally reflects the amount owed to the IRS on that particular debt. It does not necessarily reflect the amount payable to the customer on the same type of debt. In some instances, when multiple types of debts are outstanding and delinquent, the 1099-C reflects the total amount owing. You may be able to use an “asset adjustment” calculation to determine the amount due on an old debt. For more information, see Pub. Debt cancellation has many purposes in the business world. These include reducing customer payments on debts due to bad credit or lack of credit history, providing payment protection when a customer defaults, and helping to maintain and build credit quality.
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