My bank is offering to issue a "full forgiveness"of a debt on a Home Equity Line of Credit. However, if I accept the offer, the amount cancelled or forgiven will be
reported to the IRS. Is there a legal way to accept the offer and yet not trigger
a taxable event for me? Would a written letter from the bank stating that the forgiveness is not a "gift"be sufficient?
I have been successfully discharged in bankruptcy(Ch 7) of all my obligations
to this bank(1st mtg plus line of credit). Then why would I even need a forgiveness
of said debt?
1 Answer from Attorneys
Absolute Law If the second mortgage was included in the bankruptcy their would be no need for the banks offer, and can only confuse the issues.
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