Do I have to pay taxes on funds that i receive as compensation for losses due to default of promissory note,above the original loan repayment and interest?

[torre2fly]

I loaned a business money as a startup. The promissory note defaulted. 2 years later the business owner will pay me the original loan amount and an agreed amount for the loan. I will also receive an additional payment for the compensation for default of the original promissory note. I want to know if I have to pay taxes on the money that he repays me.

[Anonymous]

did you take a write-off of the note in a previous return?   if yes, then everything you receive is taxable.  there may be a special procedure in this case.  post back.

if not,  only the amount received above the amount you loaned would be taxable.