as a Percentage of Total Loans and Leases
Out of a total of 520 North American Industry Classification System industries which had both franchise and non-franchise data, SBA franchise loans had a lower charge-off
rate in 376 industries (72 percent), and had a higher charge-off
rate in 114 industries (22 percent).
1001-1(a)), the amount of deemed charge-off
"is the amount by which the tax basis of the debt exceeds the greater of the fair market value of the debt or the amount of the debt recorded on the taxpayer's books and records reduced as appropriate for a specific allowance for loan losses" (emphasis added).
In an interview with Credit Union Times, Becker stressed that Trans Union was not arguing that charge-offs
had played no role in the balance decline, just that they were not the only factor.
QA I am starting the process of clearing a couple of charge-offs
from my credit report, and I have drafted a letter I would like to send to my creditors stating that I will pay them a lump sum if they remove the negative listing.
A deemed charge-off
allows a taxpayer to take a new charge-off
for preexisting worthlessness that economically was not restored when the terms of the debt instrument were subsequently modified.
The rise in both charge-off
and delinquency rates was particularly sizable at the ten largest banks, where commercial real estate loans, as a percentage of outstanding loans, has been rising sharply for the past decade.
Pro forma net charge-offs
as a percentage of average receivables[sup.
The prior charge-off
met the normal partial worthlessness requirements.
In addition, most of the respondents who cited charge-offs
of these loans reported an increase in merger-related charge-offs
from 1989 to 1990.
In contrast to partially worthless debts, a charge-off
on the taxpayer's books is not required; however, if the IRS later rules that the debt is only partially worthless, the bad debt deduction is only allowed to the extent of the amount actually charged off on the taxpayer's books.
Respondents to the February 1990 LPS, indicated, on balance, that although the charge-off
rate on merger-related loans remained lower than that on other C&I loans, it had risen somewhat from the rate in 1988.