Debt Cancellation Is Taxable.

Debt cancellation happens when you are relieved of the responsibility to repay the debt. But the IRS considers the amount of the debt forgiven to be taxable income to you. In some cases, it can be quite severe if you don't manage the situation and make the right decisions. For instance, you can't make payments on your Real Estate Note, and it goes into Default. So the Lender says, "Instead of me having to go through the process of Foreclosure, why don't you just sign a Deed In Lieu...

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