Does the IRS consider that debt cancellation as income? Genuine question…because if my bank canceled the debt on my house the IRS would expect me to pay tax on that.
“Does the IRS consider that debt cancellation as income?”
Nope. Codified in the program.
This was without question against the court ruling that the President does not have the authority to cancel such debts. What they did is tie their brains into a pretzel to come up with liberal logic that says the payee had paid the debt in some other fashion. The total line of logic has never been fully explained.
P.S. Expect the remaining debts to be canceled, too, under a “fairness doctrine”, that some people had their debts canceled but “low income” did not. The remaining debtors can be called “low income” because their debts are newer so it might be expected they have lower incomes from being newer graduates.
Liberal always play the incremental game.
I’ve got a few industry contacts having worked with student loan programs years back. They are worried that the loss of servicing of these canceled loans is going to destroy their companies.
“if my bank canceled the debt on my house the IRS would expect me to pay tax on that.”
Yep. We saw that during the 2009-2010 housing crash. Short sales resulted in tax statements for forgiven debt.