We often see Tax Resolution services clients get tagged with a tax bill because they received debt relief in connection with real estate or other debts. This is often the uncalculated and not-advertised side of getting a break on debt. The IRS, however, has issued a revenue procedure to help taxpayers with so-called “mezzanine” financing in workouts and similar circumstances when they have debts that have been discharged in connection with real property, but most do not know about this.
So, if you have had a debt forgiven or written down/off by a creditor, you may owe taxes on the margin. It’s best to seek tax advice about if you will owe taxes on debt relief rather than hoping you don’t and ending up needing tax resolution services to get things straight later.
~Tax Resolution Services and Tax Advice~