Tax Guru – Ker$tetter Letter

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Debt Relief Is Same As Cash Sale

Posted by taxguru on June 3, 2010

Q:

Kerry, need to know this am if you can answer please. I have an offer on a lot I own. If I had the buyer pay a note directly off for me, would the sale have to be reported to IRS and would the bank report?? Thanks.

A:

The answer is yes.  IRS considers relief of debt (the pay-off of a loan) to be the same as a cash sale.

Kerry

Follow-Up:

Figured as much. Thanks.

 

 

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