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Debt forgiveness, you see, is treated as taxable income. Why? Within a nutshell, if you want to gives you money and do not have to pay it back, it's taxable. Web page . have spend for taxes on wages after a job. System of the reason that debt forgiveness is taxable is really because otherwise, might create an enormous loophole each morning tax pin. In theory, your boss could "lend" cash every 2 weeks, with the end of the year they could forgive it and none of it'd be taxable. I've had clients ask me to try to negotiate the taxability of debt forgiveness.
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