Discussion:Goofy Business?
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Discussion Forum Index --> Basic Tax Questions --> Goofy Business?
Discussion Forum Index --> Tax Questions --> Goofy Business?
Davidrayjr (talk|edits) said: | 10 March 2009 |
| Guy bought some old credit card debt (pool of several bad debts) with some attorney for cents on the dollar. He has collected maybe 45% of it. He has incurred expenses.
What the heck do you do with this? I almost think its a capital asset he is trying to earn a return but then again he is getting monthly income or return as he collects on the debts. The problem with calling it an asset is we may never know when he's done collecting. Not really sure how to handle this one. Thanks. | |
| 10 March 2009 | |
| Possibly trade or business - lots of personal activity required to collect. | |
| 10 March 2009 | |
| I had a client like this many years ago that bought delinquent notes and collected them.
I don't remember the research specifically but we treated it as a capital asset and the "basis" was deducted as the note was collected. With these notes they had negotiated a fixed amount to be repaid so we knew how much was to be received. | |
| 10 March 2009 | |
| Sounds like a bill collector - schedule C. Agree with Kevin5 that to much activitiy is required to call it an asset. | |
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