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Does anyone have experience with "imputed income" loans?
Just for clarification purposes. It is not "imputed income" but COD
income. See IRC 61(a)(12). Unless subject to exclusion under IRC 108, such as
in bankruptcy or insolvency.
Good Luck starts with a strategy and a plan. Form a strategic alliance
with
Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701
562-924-8922
Income Tax for Attorneys, Bankruptcy, IRS representation,
Fiduciary income tax returns, Estate and Gift tax returns,
Trust Protector, Independent Trustee, Court Accountings
In a message dated 2/7/2010 7:27:51 P.M. Pacific Standard Time,
easky1@yahoo.com writes:
File an osc re contempt of the stay.
Dennis McGoldrick
350 S. Crenshaw Bl., #A207B
Torrance, CA 90503
On Feb 7, 2010, at 3:52 PM, "Holly Roark" wrote:
Client signed a promissory note to his employer. The note evidences an
unsecured loan that is "forgiven" every month that client works for this employer. The loan forgiveness shows up as "imputed income" on his paychecks and
he gets taxed that "income" accordingly.
We filed BK because debtor needs to discharge this loan because it is
making his income appear artificially inflated, and that affects his alimony
payments. He doesn't care if he gets fired for filing bk and discharging this
loan to his employer.
In the meantime, he has not been fired, but the employer is still
"forgiving" this loan and showing it as "imputed income" on his paychecks and the
taxing authorities are still collecting taxes on this. In my research prior
to filing it was difficult to find anything on imputed income and BK, butwhat I concluded was that this is an ordinary unsecured promissory note that
should be discharged like any other unsecured note. I don't think the
taxing authorities should still be taxing the debtor on this note, and I don't
think the employer should still be "forgiving" it every month and making it
show up as imputed income.
I am scheduled to speak with employer's counsel tomorrow about this. Otherthan telling him that the employer needs to cease withholding taxes on
this because that violates the stay, does anyone have any other ideas about
this? If the taxing authorities want to recharacterize this note as "income",
my thought is that that will be a fight down the road between the debtor
and the taxing authorities. However, the note itself does not indicate that
it is "income", and my view is that during the course of the BK, the noteshould no longer be "forgiven" by the employer on a monthly basis, and thedebtor should not be taxed on this note any more due to such loan
"forgiveness"I am scheduled to speak with employer's counsel tomorrow
Any thoughts/suggestionAn
Holly Roark
_holly@roarklawoffices.com_ (http://es.com/)
Just for clarification purposes. It is not "imputed income" but COD
income. See IRC 61(a)(12). Unless subject to exclusion under IRC
108, such as in bankruptcy or insolvency.
Good Luck starts with a strategy and a plan. Form a strategic alliance with
Robert J. Suhajda,
MS,CPA
17721 Norwalk Blvd.
#43
Artesia, CA 90701
562-924-8922
Income Tax for Attorneys, Bankruptcy, IRS representation,
Fiduciary income tax returns, Estate and Gift tax
returns,
Trust Protector, Independent Trustee, Court
Accountings
In a message dated 2/7/2010 7:27:51 P.M. Pacific Standard Time,
easky1@yahoo.com writes:
The post was migrated from Yahoo.
File an osc re contempt of the stay.
Dennis McGoldrick
350 S. Crenshaw Bl., #A207B
Torrance, CA 90503
On Feb 7, 2010, at 3:52 PM, "Holly Roark" wrote:
Client signed a promissory note to his employer. The note evidences an unsecured loan that is "forgiven" every month that client works for this employer. The loan forgiveness shows up as "imputed income" on his paychecks and he gets taxed that "income" accordingly.
We filed BK because debtor needs to discharge this loan because it is making his income appear artificially inflated, and that affects his alimony payments. He doesn't care if he gets fired for filing bk and discharging this loan to his employer.
In the meantime, he has not been fired, but the employer is still "forgiving" this loan and showing it as "imputed income" on his paychecks and the taxing authorities are still collecting taxes on this. In my research prior to filing it was difficult to find anything on imputed income and BK, but what I concluded was that this is an ordinary unsecured promissory note that should be discharged like any other unsecured note. I don't think the taxing authorities should still be taxing the debtor on this note, and I don't think the employer should still be "forgiving" it every month and making it show up as imputed income.
I am scheduled to speak with employer's counsel tomorrow about this. Other than telling him that the employer needs to cease withholding taxes on this because that violates the stay, does anyone have any other ideas about this? If the taxing authorities want to recharacterize this note as "income", my thought is that that will be a fight down the road between the debtor and the taxing authorities. However, the note itself does not indicate that it is "income", and my view is that during the course of the BK, the note should no longer be "forgiven" by the employer on a monthly basis, and the debtor should not be taxed on this note any more due to such loan "forgiveness". It should be discharged like any other unsecured note.
Any thoughts/suggestions?
Holly Roark
holly@roarklawoffices.com
File an osc re contempt of the stay.Dennis McGoldrick350 S. Crenshaw Bl., #A207BTorrance, CA 90503On Feb 7, 2010, at 3:52 PM, "Holly Roark" <roarklaw@yahoo.com> wrote:
Client signed a promissory note to his employer. The note evidences an unsecured loan that is "forgiven" every month that client works for this employer. The loan forgiveness shows up as "imputed income" on his paychecks and he gets taxed that "income" accordingly.
We filed BK because debtor needs to discharge this loan because it is making his income appear artificially inflated, and that affects his alimony payments. He doesn't care if he gets fired for filing bk and discharging this loan to his employer.
In the meantime, he has not been fired, but the employer is still "forgiving" this loan and showing it as "imputed income" on his paychecks and the taxing authorities are still collecting taxes on this. In my research prior to filing it was difficult to find anything on imputed income and BK, but what I concluded was that this is an ordinary unsecured promissory note that should be discharged like any other unsecured note. I don't think the taxing authorities should still be taxing the debtor on this note, and I don't think the employer should still be "forgiving" it every month and making it show up as imputed income.
I am scheduled to speak with employer's counsel tomorrow about this. Other than telling him that the employer needs to cease withholding taxes on this because that violates the stay, does anyone have any other ideas about this? If the taxing authorities want to recharacterize this note as "income", my thought is that that will be a fight down the road between the debtor and the taxing authorities. However, the note itself does not indicate that it is "income", and my view is that during the course of the BK, the note should no longer be "forgiven" by the employer on a monthly basis, and the debtor should not be taxed on this note any more due to such loan "forgiveness". It should be discharged like any other unsecured note.
Any thoughts/suggestions?
Holly Roark
holly@roarklawoffices.com
The post was migrated from Yahoo.
Client signed a promissory note to his employer. The note evidences an unsecured loan that is "forgiven" every month that client works for this employer. The loan forgiveness shows up as "imputed income" on his paychecks and he gets taxed that "income" accordingly.
We filed BK because debtor needs to discharge this loan because it is making his income appear artificially inflated, and that affects his alimony payments. He doesn't care if he gets fired for filing bk and discharging this loan to his employer.
In the meantime, he has not been fired, but the employer is still "forgiving" this loan and showing it as "imputed income" on his paychecks and the taxing authorities are still collecting taxes on this. In my research prior to filing it was difficult to find anything on imputed income and BK, but what I concluded was that this is an ordinary unsecured promissory note that should be discharged like any other unsecured note. I don't think the taxing authorities should still be taxing the debtor on this note, and I don't think the employer should still be "forgiving" it every month and making it show up as imputed income.
I am scheduled to speak with employer's counsel tomorrow about this. Other than telling him that the employer needs to cease withholding taxes on this because that violates the stay, does anyone have any other ideas about this? If the taxing authorities want to recharacterize this note as "income", my thought is that that will be a fight down the road between the debtor and the taxing authorities. However, the note itself does not indicate that it is "income", and my view is that during the course of the BK, the note should no longer be "forgiven" by the employer on a monthly basis, and the debtor should not be taxed on this note any more due to such loan "forgiveness". It should be discharged like any other unsecured note.
Any thoughts/suggestions?
Holly Roark
holly@roarklawoffices.com
The post was migrated from Yahoo.