Do I Have to Report a Cancelled Debt on my Taxes When Someone Dies?
Full Question:
Answer:
Imputed income is a term the Internal Revenue Service (IRS) applies when they feel that the value of a benefit or service should be considered as income for the purposes of calculating your federal taxes. For example, if you have a contract with the other owners requiring them to pay a share of the expenses and you forgive their indebtedness, it may be counted as imputed income on the other owners' taxes as a cancelled debt. The answer will depend on all the circumstances involved, such as whether you were named in the will and whether the loan was secured. We suggest you consult your accountant who can review all the facts and documents in your situation.
Please see the information at the following link:
http://www.irs.gov/taxtopics/tc431.html
