I am starting to get settlement offers from creditors. About 50 cents on the dollar. I owe 12k on this one card and they are willing to settle for $5300.00.
I know they will send me a 1099C for the forgiven amount which is about $6500. I cannot prove insolvency because I have IRA and 401k that far exceeds the forgiven amount. My question is this: Can I put $5000 into a traditional IRA to offset the 1099C income that I will receive come tax time? Does anyone know the answer to this??? I sold my car recently and have the cash on hand to settle the debt should I forgo chapter 7. Would this be a wise tax move?
I know they will send me a 1099C for the forgiven amount which is about $6500. I cannot prove insolvency because I have IRA and 401k that far exceeds the forgiven amount. My question is this: Can I put $5000 into a traditional IRA to offset the 1099C income that I will receive come tax time? Does anyone know the answer to this??? I sold my car recently and have the cash on hand to settle the debt should I forgo chapter 7. Would this be a wise tax move?
Comment