Question
Sandy owes $28,000 to a Palm Beach Bank on December 31, 2020. She also has an additional $10,000 of credit card debt. Sandy has only
Sandy owes $28,000 to a Palm Beach Bank on December 31, 2020. She also has an additional $10,000 of credit card debt. Sandy has only $125,000 in assets on December 31, 2020 as well. On January 1, 2021, Palm Beach Bank informs Sandy that they will be discharging her $28,000 debt.
Does Sandy have gross income?
Suppose that Sandy’s $28,000 is not bank debt but is student debt instead. Is the forgiveness of Sandy's debt considered gross income?
Suppose that the debt was forgiven pursuant to a federal program which required Sandy to work as a medical professional in rural Nebraska for 10 years?
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
17th edition
78025826, 978-1259564239, 1259564231, 978-0078025822
