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James48

(4,416 posts)
Wed Aug 24, 2022, 11:45 PM Aug 2022

"Cancelled debt is reportable to the IRS.

From the IRS:

“In general, if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable and you must report the canceled debt on your tax return for the year the cancellation occurs. The canceled debt isn't taxable, however, if the law specifically allows you to exclude it from gross income. These specific exclusions will be discussed later.”-

Source: topic # 431 at the IRS

https://www.irs.gov/taxtopics/tc431


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"Cancelled debt is reportable to the IRS. (Original Post) James48 Aug 2022 OP
It is tax free Johnny2X2X Aug 2022 #1
Hope you didn't just pee in someone's Wheaties EYESORE 9001 Aug 2022 #3
Brilliant foresight Nevilledog Aug 2022 #4
These are non taxable because of one other act questionseverything Aug 2022 #2
Because Of State Taxes, There Will Probably Be A Revised Form 1099-C SoCalDavidS Aug 2022 #5
I'll bet that will be red states like KS FoxNewsSucks Aug 2022 #6
Actually, Floriduh Doesn't Have A State Income Tax nt SoCalDavidS Aug 2022 #8
There is an exemption through 2025 Recursion Aug 2022 #7
To Do That, Democrats Will Need To Maintain Control Of House, And Obviously Senate, In November nt SoCalDavidS Aug 2022 #9
As always, electing Republicans courts disaster Recursion Aug 2022 #10

Johnny2X2X

(18,744 posts)
1. It is tax free
Wed Aug 24, 2022, 11:47 PM
Aug 2022

As part of the American Rescue plan. All canceled student debt is not taxable through 2025.

SoCalDavidS

(9,998 posts)
5. Because Of State Taxes, There Will Probably Be A Revised Form 1099-C
Wed Aug 24, 2022, 11:55 PM
Aug 2022

Some States won't conform, meaning the forgiveness could still result in State Income Tax.

Therefore, the Government will probably still issue a Form 1099-C, but when the amount is entered into the Tax Program, it won't be subjected to Federal Income Tax.

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