Watson CPA Group - Knowledgebase


Mortgages, Bad Debts
What is Cancellation of Debt? Is it taxable income?
By Jason Watson (Google+) If you borrow money from a commercial lender and the loan is later canceled or forgiven, you may have to include the cancelled amount in your taxable income. When you borrowed the money you were not required to include the loan proceeds in your income because you had...
31 Dec, 2012 Views: 0 Comments: 0
Is cancellation of debt always taxable?
By Jason Watson (Google+) In general, the term income as used in the Internal Revenue Code includes income from any source, including any accession to the taxpayer’s wealth. It follows then that a taxpayer who has incurred canceled debt generally has realized an accession to wealth. So, is...
31 Dec, 2012 Views: 0 Comments: 0
Can I deduct a bad debt on my tax return?
By Jason Watson (Google+) Yes. If someone or a business owes you money and you cannot collect, you have a bad debt. There are two kinds of bad debts- business and non-business. Business bad debts are fairly straightforward and come from operating your trade or business. All other bad debts are...
05 Sep, 2014 Views: 0 Comments: 0
The Mortgage Forgiveness Debt Relief Act and Debt Cancellation
By Jason Watson (Google+) If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through...
03 Oct, 2018 Views: 0 Comments: 0
Can I deduct the loss on my primary residence?
By Jason Watson (Google+) Yes, but practically No. Many people are upside down on their personal residence where the mortgage exceeds the value of the home. And naturally taxpayers want to deduct this loss when they sell their home. Losses on personal property including your residence are not...
18 Dec, 2012 Views: 0 Comments: 0