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In the eyes of the IRS, a charge-off can have significant implications, especially it's reported as income. Here's a breakdown of key points: 1. Charge-Off as Income: When a debt is charged off and canceled, the IRS may consider the forgiven amount as income. This is because you're receiving a financial benefit without the obligation to repay it. 2. Difference Between Cancellation of Debt Income and Ordinary Income: - Cancellation of Debt (COD) Income: This is considered when a lender forgives o
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