Will I Be Taxed on a Cancelled Debt?
Full Question:
Answer:
Imputed income is also 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. I 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