Yes, I have heard of this business practice and it makes perfect sense to me. John Doe goes to the bank and borrows $200,000 to buy a farm. The bank loans him the money and he is now $200,000 (or one farm richer). He begins repaying the loan but, with $100,000 still owed, he stops paying. The bank is hung out for $100.000. They foreclose on the farm in an effort to recuperate some or all of their money. They recover $60,000 but they are still $40.000 in the hole. If they "write it off" John still has $40,000 of the banks money. Through foreclosure his debt is forgiven and he walks away with the $40,000. In the eyes of the IRS that money is income to be treated like any other earnings. Therefore, the bank is required to issue a 1099 so John can be taxed properly. Kind'a sucks but its the law!
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Today's Featured Article - The 8N and the Fox - by Zane Sherman. Dec. 13 1998, Renfroe, Alabama. Last niht I dreamed about the day that I plowed the field of about 10 acres over on what Jimmy and Dandy called the Ledbetter field. I was driving the 1948 8N Ford tractor that Jimmy bought in 48 new This was prebably in about 1951 and maybe even befor the house was built. This would have made me to be about16 years old and I drove the tractor for nothing and would have paid to drive it if I had had any money which I didn't, but neit
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