Settle a Debt Last Year? Here's How You Can Avoid a Big Tax Bill

Lynette Khalfani-Cox photo logo
Lynette Khalfani-Cox photo logo

Debt forgiveness – getting a company to write off a debt or let you pay less than you owed on a loan – might seem like a great thing at the time you do it.

What cash-strapped consumer knee-deep in credit card debt wouldn't enjoy the financial relief of settling their debts for perhaps as little as 50 cents on the dollar? And what struggling homeowner who wants to be rid of an unbearable mortgage wouldn't be glad to walk away from that loan – even if it takes a short sale or foreclosure to accomplish the trick?

Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.
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