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Discussion Forum Index --> Tax Questions --> Loan/grant
Gregdean (talk|edits) said:
| 19 June 2007
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| I have a client who buys downtown properties and converts them to lofts. This last year he received funds from the local redevelopment commission. They issued a 1099G with $40,000 in box 6 as taxable grant. However, when I finally received the paperwork from the client it showed he received a loan(with a note and mortgage)for $40,000 which would be forgiven at the rate of 20% per year. My contention with the redevelopment commission is that the amount that is forgiven each year is taxable, not the total amount received. Of course the commission said they would look into it and get back with me. It's been two months and have not heard a word. My client is on extension so time is not a factor yet. Am I correct in my understanding of this situation?
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Bottom Line (talk|edits) said:
| 20 June 2007
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| Sounds like you're right. You may want to rattle some cages over there to get them to correct the 1099G
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Gregdean (talk|edits) said:
| 20 June 2007
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| I called again yesterday, left a message, still waiting for answer. I appreciate your response to my question. Thanks. Greg
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Riley2 (talk|edits) said:
| 21 June 2007
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| If the client has satisfied all of the conditions for the total cancellation of the debt, then the total COD income is taken into account currently. Otherwise, the COD income is taken into account as the conditions for cancellation are satisfied.
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