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for the year in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
Respondent determined a deficiency of $2,609 in petitioner’s
Federal income tax for 2002. The issue for decision is whether
petitioner received $11,628 of income from cancellation of
indebtedness owed to General Motors Acceptance Corp. (GMAC).
Background
The undisputed facts, as stated by petitioner, are as
follows:
The Petitioner incurred an obligation to General
Motors Acceptance Corporation (hereinafter “GMAC”) in
the original amount of $14,435.99, in conjunction with
the acquisition of a 2001 Saturn SL1 vehicle from
Saturn of Knoxville on April 28, 2001. This obligation
was payable through 39 monthly payments of $367.41,
beginning April 28, 2001. The Petitioner failed to pay
the monthly payments in accordance with this contract,
and the General Motors Acceptance Corporation declared
the obligation in default and repossessed the vehicle.
The vehicle was then sold, and the deficiency
obligation then remaining and due and owing General
Motors Acceptance Corporation was $11,628.77. Demand
was made upon the Petitioner for payment of this
deficiency obligation by letter from GMAC dated
December 21, 2001. * * *
It is also undisputed that GMAC sent a Form 1099-C, Cancellation
of Debt, to petitioner and to the Internal Revenue Service in
2002, reporting that petitioner received cancellation of
indebtedness income in 2002 in the amount of $11,628. Petitioner
contends that GMAC never released, canceled, nor discharged his
obligation and that the Form 1099-C was erroneous.
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