2 ms·
It is income. Someone gave you money. Otherwise, why wouldn’t a company “loan” you a higher salary and then just “forgive” the debt? Or, you could set up a comp
by briandear 7y ago
It is income. Someone gave you money. Otherwise, why wouldn’t a company “loan” you a higher salary and then just “forgive” the debt? Or, you could set up a company to loan yourself money — the company deducts the “loss” and you don’t pay taxes on the gain.
- dmix 7y agoLike all laws there should be some context. But I guess you’re right it’s an easy loophole to exploit and the simpler the tax law the better.
- Retric 7y agoThe principal is presumably income, however the interest or fees should not be. The IRS will even occasionally cancel debt that’s mostly fines and interest without considering it income.