A Standing For Taxes - Part 1: Difference between revisions
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Revision as of 09:26, 31 October 2024
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I've had clients ask me to utilize to negotiate the taxability of debt forgiveness. Unfortunately, no lender (including the SBA) transfer pricing to improve to do such what. Just like your employer is required to send a W-2 to you every year, a lender is instructed to send 1099 forms for all borrowers possess debt forgiven. That said, just because lenders will need to send 1099s doesn't imply that you personally automatically will get hit using a huge government tax bill. Why? In most cases, the borrower can be a corporate entity, and an individual might be just an individual guarantor. I know that some lenders only send 1099s to the borrower. The impact of the 1099 pertaining to your personal situation will vary depending on kind of entity the borrower is (C-Corp, S-Corp, LLC, etc). Most CPAs will have the capacity to let you know that a 1099 would manifest itself.
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