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#Breitbart.com EXCLUSIVE BOMBSHELL: Romney Lost

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Killgore Trout11/09/2012 11:48:48 am PST

re: #14 Kragar

We buy debt for pennies on the dollar, but instead of collecting it, we abolish it. We cannot buy specific individuals’ debt – instead, we help liberate debtors at random through a campaign of mutual support, good will, and collective refusal.

Interesting idea but I’m skeptical if they’ve thought this all the way through.
taxes.about.com

Canceled Debt That is Taxable
Anytime a lender cancels or forgives debt, that is usually a taxable event. “Generally, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income.” (Source: Publication 525)

Debt forgiveness is reported by the lender using Form 1099-C, Cancellation of Debt. Individuals report the forgiven debt on their Form 1040, Line 21 as other income.

The tax laws provide several exceptions to the tax treatment of forgiven debts. Tax-free treatment of mortgage debt is the most generous and easiest to calculate.

Mortgage Restructuring and Foreclosures
Individuals who lost their homes through foreclosure will not have to pay income tax on the amount of mortgage debt that was forgiven or canceled. Tax-free treatment is also available to people who restructured their mortgages loans for a lower balance.

Since they’re not going through the foreclosure/restructuring process they are creating possibly a very large tax liability for random people who they know nothing about. It might not be such a smart idea.