Anyway, it did provide this happy tidbit of nostalgia. Remember the days of these lolcat memes and how popular they were? Oh how sweet. I wish the world were so innocent as back in those good old fashioned times. You know, 2012?
So what's this about fat cat bankers? Two pieces of mail. Two Form 1099-Cs.
I got one of these before back a few years ago when I dealt with one of my creditors to avoid them progressing in their lawsuit with me. I paid them $1,000 and they "forgave" me the rest of my debt, yet, surprise, I had to declare the amount they forgave as income on my taxes. Well it happened again this time with two creditors that hadn't even gone the lawsuit route, and, I didn't at all ask for it! Wells Fargo and one of the biggest debts, Discover.
Discover, apparently, over the course of the past few years or so, got bought out by Capital One since they own them now, or at least they own my account. So that puts Capital One in a very unique position of a bank that I burned not once, not twice, not three times, but four times by my count as of this news. And, I have two active cards with them right now in very good standing! But this post isn't about the good stuff and the good credit and the things I've done right, it's the things I've done bad. And it's the cautionary tale that you never get away from debt, not really. Even when they cancel your debt, new debt arises out of it.
You see, because of these two new pieces of mail, it raises my income for 2025 from $13,000 to almost $36,000! Yes, I told you the Discover Card was a big debt, almost $20,000 all by itself.
So on the one hand, these two pieces of mail effectively wiped out roughly 25% of my overall debt in one fell swoop. But since it elevated my taxable income, well beyond the $13,000 that would have been absorbed by the $15,750 standard deduction, according to a quick glance at the tax tables; it would mean I'd owe in the neighborhood of some $2,200 in taxes! Well Daddy can't afford that!
So I begged Google for some possible relief and apparently there is some but only if I do a lot of math and the ability to decipher creatively some world-class gobbledygook bullshit.
So apparently if you get the 1099-C and you really can't afford the taxes on it you have to come up with an excuse to the government of why you can't pay those taxes. Luckily in my case, I qualify as insolvent. First I had to fill out a long insolvency worksheet which basically asked me about all of my liabilities and assets in intense detail, line by line, then I had to transfer the resulting amount of insolvency to another worksheet where I determine was that greater than or less than the amount that was the sum of the 1099-C forms, then I had to complete form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). My total amount of my 1099-C forms had to be included on line 10A, but I was cautioned to not use LINE 10B that was used in the case of qualified Farm Indebtedness ONLY. I also had to read through all of the other lines in Part Two of this form to make sure that none of these qualified such as to reduce any net operating loss that occurred in the tax year of the discharge or carried over to the tax year of the discharge. Or, perhaps, reduce any passive activity loss and credit carryovers from the tax year of the discharge. Or, perhaps, the discharge of qualified real property business indebtedness applied to reduce the basis of depreciable real property that you elect under Section 108-b5 to apply first to reduce the basis, under Section 1017, of depreciable property, applied to reduce any net operating loss that occurred in the tax year of the discharge or carried over to the tax year of the discharge.
Well isn't that nice. The fat cats are indeed rolling on a bed of $100 bills, laughing their furry asses off. They know what I have to go through. They know the hoops I have to jump through. Just like real cats, they trained us people and got us to do humiliating tricks for them. Aren't we the fools.