IRS war on the handicapped!!

Discussion in 'Education' started by Two Thumbs, Apr 6, 2012.

  1. Two Thumbs
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    Two Thumbs Platinum Member

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    New Jersey Woman's Student Loan Debt Creates Tax Nightmare - Yahoo!

    When Kim Thompson's $91,000 student loan balance was cancelled due to total disability, she thought she had put at least one of her problems behind her. Instead, she traded it for another: a massive debt to the IRS.
    Two years ago, Thompson, who lives in New Jersey, was diagnosed with a tumor that eventually led to the removal of most of her small intestine, a pulmonary embolism, and 12-hour-a-day IV feeding sessions. She retired from her job on a disability pension in July 2010, and was able to get her federal student loans cancelled.
    There was no mention, however, that the debt would be reported to the IRS as Cancellation of Debt Income (CODI).
    "They didn't tell me it was taxable income," she says. "I had no idea."
    The IRS considers most types of cancelled debt taxable income. Lenders must report cancelled debts of $600 or more to the IRS on a 1099-C form. The IRS estimates some 6.3 million 1099-C's – for all types of debts, including student loans, credit cards, mortgages, etc. – were filed this year reporting CODI for the 2011 tax year.

    she wouldn't now owe the IRS some $26,000. In addition, she owes $5,000 to the state of New Jersey for cancellation of debt income.



    You don't owe, so you owe. :lol:
     
  2. Douger
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    Douger BANNED

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    Gawd Blast murka !!! #1
     
  3. Ariux
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    Ariux BANNED

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    Why should this woman not have to pay taxes on $91,000 of income that was just handed to her? Because, boohoo, she's disabled?
     
  4. Two Thumbs
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    Two Thumbs Platinum Member

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    How is not owing money income?
     
  5. strollingbones
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    strollingbones Diamond Member

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    debt forgiveness many times counts as income......
     
  6. Two Thumbs
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    Two Thumbs Platinum Member

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    Seems to me that if you are in the position to need and get your debt forgiven, taxing that as income is kicking a dog while he's down.
     
  7. editec
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    editec Mr. Forgot-it-All

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    Because a WRITE OFF is a GIFT?

    And GIFTS are TAXABLE?

    Just a guess, but a damned good one.
     
  8. Katzndogz
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    Katzndogz Diamond Member

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    When the credit card company offers you a low cost payoff. The difference is taxable. When you think you are taking advantage of a government rebate to get your fuel efficient car, the rebate is taxable income.

    If she didn't know, she should have known. Income averaging may reduce her liability then she can work out a payoff program.
     
  9. Ariux
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    Ariux BANNED

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    She received $91,000 and you're asking how not having to pay it back makes it count as income?

    (Why are people so fucking stupid?)
     

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