Where can I write off collection judgements I paid or where/how do I mark I paid them when sold a property?

[MustangGTMan]

Years ago, I had lost my job and fell behind on credit card debt.  I had some collection judgements from it. I know the credit card companies had written off the debt those years back and I was taxed as income.  I recently sold inherited property that apparently had the liens from the collection judgements on it.  So where or how do I list that I paid the judgements off. The money was paid from the sale of the property and directly to the collection companies. How do I file the amounts I paid?

[Carl]

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.

[MustangGTMan]

Even if I was already taxed from previous years for the debt? I know I was charged for the debt, making it income to me, being taxed for it years ago, so I have been taxed for it, so I should be able to gain a tax credit back for it since paying it off and already being taxed previously for it.

[Carl]

Even if I was already taxed from previous years for the debt?

You're not taxed on debt. You're taxed on income.

Now you may have paid some kind of penalty in the past for the unpaid debt. But that's not a tax, and the amount of the penalty or fine paid is not a tax deduction either.