Reporting tenant debt to IRS

[Calvin N.]

I have read, but want to confirm that I can report forgiven rent payments from a tenant as income to the IRS. The tenant moved out and owes me for last month and a half rent plus utilities. Instead of going after them in small claims court (they don't have any money) I would prefer to report it as income to the IRS for them and let the IRS have a chance of getting some taxes out of them.

Have any of you done this? If so, what form did you use to report it?

Thanks!

[Frank Adams]

I've done it, use a 1099, or "substitute 1099".

In all cases what I've done first is send them a letter stating what I will do and that while I may not get any money as a result of reporting the forgiven debt as income, I'll have the satisfaction of knowing that they'll now owe a % of that money to an agency of the government that:

Never forgets,

Never forgives,

Is relentless in collecting,

and that the debt to the IRS is NOT forgiveable in bankruptcy.

I've got a very high collection rate on those letters.