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Fun Fact Friday: Debt Forgiveness = Income

  • Hilary Leitch, Esq.
  • May 16, 2014
  • 1 min read

From the IRS website:

Generally, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purposes. The lender is usually required to report the amount of the canceled debt to you and to the IRS. (There are several exceptions, such as insolvency or bankruptcy.)

 
 
 

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