What are your thoughts on student loan forgivness?
I guess the thing is that if someone loans you money, you should pay it back. It's only fair, right? That's the purpose of a mortgage, for example.
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Heartlander · 80-89, M
It's purely a political move by Democrats.
An interesting part of this discussion is that the IRS considers loan forgiveness as income which is fully taxable. So if you forgive someone's debt you should send then a 1099 to alert them that this is a recorded transaction. And since the IRS also gets a copy of that 1099 they will verify that the individual's 1040 accurately accounted for all the individual's income, including the loan forgiveness, much like they do with W2s.
BUT, I have yet to hear anything about that part of Biden's loan forgiveness plan. Considering that as much as $20,000 in income taxes may be due from a $50,000 loan forgiveness, the silence is very revealing. Will Biden also try to make it a tax-free loan forgiveness?
An interesting part of this discussion is that the IRS considers loan forgiveness as income which is fully taxable. So if you forgive someone's debt you should send then a 1099 to alert them that this is a recorded transaction. And since the IRS also gets a copy of that 1099 they will verify that the individual's 1040 accurately accounted for all the individual's income, including the loan forgiveness, much like they do with W2s.
BUT, I have yet to hear anything about that part of Biden's loan forgiveness plan. Considering that as much as $20,000 in income taxes may be due from a $50,000 loan forgiveness, the silence is very revealing. Will Biden also try to make it a tax-free loan forgiveness?