Carl
Level 15

Deductions & credits

The amounts paid by you to satisfy liens or judgements is just not deductible from your taxable income. Just like what you pay for a car is not tax deductible. If a judgement against you for what you owe on the car gets paid off with the gain on property that you sell, it's still not deductible. The portion of the gain used to pay that amount is still taxable income to you.