Tax implications of discounted judgments? - Posted by Bob

import · January 18, 2006, 4:56pm

Posted by Rick Harmon (CA) on January 19, 2006 at 09:50:38:

You haven’t realized the profit until you receive it. Buying a note at discount means that you don’t receive the principal (and/or acrued interest) until the debtor pays it back so I would defer it until I receive the payment. If paid in installments, apply the early installments to the regular principal and interest and the amount of the gain at the end.

import · January 18, 2006, 4:56pm

Posted by Bob on January 18, 2006 at 17:56:11:

When you purchase a judgment at a discount, is the discount treated as interest income, just as the discount in a note would be?