[Ted Grant]

Here’s the thing about forgiven debt: the IRS considers it income.

So the debtor needs to pay income tax on the forgiven amount.

So now these folks will have IRS problems.

[NCLaw441]

You are correct, of course, about debt forgiveness as income for tax purposes. I’d recommend that, rather than forgive the debt, the buyers of the note modify the terms to say, 100 years to pay at $10 per month, or similar terms. I’m no accountant or tax lawyer, but that would seem to work. Or, the debt buyer could simply not enforce the loan rather than actively forgiving it.

[ridesthemiles]

This is their brain on drugs.........