School Loans. Will the IRS charge me money when my loan is forgiven? Such as total disability. And what will they charge on a 55,000 loan, that was forgiven! (forebearance)
Asked on 8/06/14, 2:01 pm
1 Answer from Attorneys
Virginia Prihoda
Law Offices of Virginia Prihoda
The general rule of thumb is that discharge of indebtedness represents taxable income. If you can prove you are insolvent (debts exceed your assets, measured at the time BEFORE you debt is forgiven) you may qualify to have all or part of the debt excluded from recognition as taxable income. Consult a tax advisor or start by reading the instructions and the tax form for IRS Form 982.
Answered on 8/07/14, 7:16 am
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