credit card and $100 bills

Debt that is forgiven or cancelled by an official lender is deemed to be taxable income. For example, if you settle a $5,000 credit card debt for $2,000, you will owe income tax on the $3,000 that was forgiven.

For further questions about Phoenix personal income tax accounting, please contact Singer Tax & Accounting, PC today at (602) 482-8006.