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Debt forgiveness, you see, is treated as taxable income. Why? From a nutshell, on the web gives serious cash and on pay it back, it's taxable. That you have to pay taxes on wages off of a job. Some of the reason that debt forgiveness is taxable happens because otherwise, it create a large loophole in the tax rule. In theory, your boss could "lend" cash every 2 weeks, as well as the end of 12 months they could forgive it and none of it would be taxable.

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People hate paying income tax. Tax avoidance strategies are entirely legal and should be taken advantage of. Tax evasion, however, isn't. Make sure you know where the fine lines are.