Replies

1. 
   csnow | Sep 03, 2004 09:54pm | #1

   Somehow, I think that might be a tad illegal.

2. 
   BillHartmann | Sep 03, 2004 09:56pm | #2

   " because you "gave" them work valued at xxx dollars"

   GIFTS are not deductable by the giver or taxable by the recipent.

   I suspect that this will end up blowing back on you.

   Now if you get a court order and can't collect you can deduct the bad busineess debt.

   But also you "might" be able to send them a 1099 in that case. I know that under some circumstances that a mortgage company that forgive a debt an issue a 1099 (I think it is a 1099A) and they will owe taxes on it.

1. 
   IMERC | Sep 03, 2004 11:16pm | #4

   How would it be a gift???

   Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming....                                                                   WOW!!!   What a Ride!

1. 
   BillHartmann | Sep 03, 2004 11:38pm | #5

   I was quoting his wording.

   For a true transaction there has to be a true exchange of value or compensation.

   As I said get a court order and then it is a completely different matter.

1. 
   Lenny | Sep 04, 2004 12:46am | #6

   Makes sense to me...I know a "forgiven loan" is considered income.

3. 
   CapnMac | Sep 03, 2004 10:13pm | #3

   Fails the "sensible" test:  If sounds sensible, it is not permitted.

   You could offer a "royalty" style payment plan, the work is done for a token amount, but you get x percentage of any profit realized when the property is sold . . .

   Naw, too sensible . . .

   Occupational hazard of my occupation not being around (sorry Bubba)
4. 
   WayneL5 | Sep 04, 2004 12:50am | #7

   I think you are on to something.  For several years I was a volunteer on the board of a credit union.  Dealing with people who don't pay back their loans was a routine topic.  If we had a case where all collection efforts were exhausted, we'd send a 1099.  The reason was because they received income from the credit union.  Even if it was unlawfully obtained (by failing to abide by a contract) it's still income.  Therefore, it's taxable.  If I understood it right, we not only were allowed to do this, we were required to report the income.

   I did not result in getting our money back, but there was a feeling of poetic justice.

   I am not a lawyer or accountant, so obviously you need to consult one before you do it.

   We did find that often a single letter from our collection lawyer was effective even after many contacts from the credit union staff were not.

1. 
   Isamemon | Sep 04, 2004 03:26am | #8

   I have had nightmares where lawyers had to be in on it. I guess thats part of the biz.

   I know one firm who  builds minimum 50 houses a year, has 4 lawyers,really, unfortunately thier quality, they need them,

   can you imagine the waste of money to have 4 lawyers on retainer and pretty much one is full time.

   anyway

   but maybe as a side of our company we should dba as Vinnie Scarface Collections,

   wouldnt take much to list the name with the state, put in a seperate phone line, and when office help has little to do , call under the name of uncle vinnie, get em to talk italian accent, talk about deep sea fishing trips or deep concrete foundations poured at night

   sorry, im good at pissin people off at this web site so if I just offended anyone Im sorry, just going with movie stereo types.

   to be honest, knock on wood and praise god, we dont have that much trouble

5. 
   jonblakemore | Sep 04, 2004 06:22am | #9

   You deduct expenses. If they fail to live up to the contract, it is not an expense so you cannot deduct it.

   Now if you are attention hungry, I'm sure you could get some from the IRS if you tried this.

    

   Jon Blakemore