Tax Law

There are so many Dems that promise to forgive student loan debt if they are elected.

Now I love that idea; I have over 100,000K in student loan debt.

I have to tell you a story. A sad but true story. So please get out your "little violin" for me. Really soft hearted people get tissue too.

On Friday I got a letter from the IRS saying I owe $4,823 in back tax. Why? Natural question.... I did not try to cheat the IRS, but I had a student loan forgiven (private loan that I did a settlement on.... paid 200$ a month for 5 years then offered and agreed to a $10,000.00 settlement. I was then forgiven about 20,000K.

I did not know forgiven debt is income..... I WAS NOT GIVEN 20K; I WAS FORGIVEN A 20K DEBT.

But in my letter for the IRS, thanks to Obama, forgiven debt IS INCOME!!!!

If a Democrat is elected and everyone is forgive our student loan debt, I wonder how much we will have to pay the government in taxes.... I have NEVER, NO NOT NEVER heard one Dem say they will change the tax law!!!

I don't mean to sound unkind, but you were forgiven over $15,000; quit your whining, pay your tax, read Matthew 18: 21-35, and be thankful for God's provision.

I am paying it, but that is not the topic... The topic is what are the Dems holding back with the promise of forgiven loans....

Right now we can declare bankruptcy on money owed to the IRS. But if Dems' when how quick will that law change?

So glad you brought this up!!!

The point is all the Dems that say student debt is forgiven then is that forgive debt going to be concerned income and we still have to pay, now under what Obama did with the tax law.... of course not the full amount but the promise of debt fee is misleading....

Useful information ty. I was considering settling at least on smaller loans but in a way settling feels wrong also...good to have more to think about I suppose. I do have a bit much though alas.

Right now income tax is something you can file in bankruptcy (not student loans of course), but what if a Dem becomes president and all student loans are forgiven,if they do not change the tax law forgiven debt is considered income and then on top tey change bankruptcy law and we cannot file bankruptcy on taxes... We (the people) can be in debt to the government for avery long time just like student loans....

I think they the (Dems) should either disclose this to us or come up with a plan to rescue us from this too.

This is actually an incredible loophole you have found in loan forgiveness. I haven't heard anyone mention this and this is astounding.

The IRS has more power than any other collection agency (including the dept of education to garnish) so this is quite troubling...not 100% sure though.


At least they can't take you to jail unless you evade.

Sadly I did not find it the IRS found me.... But I can honestly say I did not know forgive debt was Income by the IRS.... That is crazy right!?!

but at least you had enough to settle...that's something to be thankful for

I do not have almost 5K so I filled out the papers to to make payments over 72 mo. with 19.99% interest.... lol...

I will probably file bankruptcy before laws can change (if they do)... That was ot income I did not get almost 20k in my pocket...

The GREATNESS ABOUT AMERICA is free consultations with a lawyer!!!! WE DO LIVE IN THE GREATEST COUNTRY ON EARTH.... RIGHT NOW!!!!

What??? the IRS charges interest? That's absurd. It is most definitely not common knowledge that when a loan is forgiven you owe that money. Just sounds rather shady to pay back what you owe and have to be a victim of usury...To be fair though you did agree to usury in the first place. It's just curious.

Have you calculated what you will owe the Gov + the loan with interest + forgiven amt all factored in = final amt?

This is doing simple math, I do not know how to compound interest but just do it like it is not compounded.... In 72 mo. I will have to pay 21,600 on a 5k debt to the IRS if interest is only 6%.

I took 5,000*(6%*)72= How long the IRS (max) gave me....

It was last year's taxes... kicker I got a 3k refund... I have not figured up how much I owe from Aperil today... They could have kept their refund... I can pay a k..... but money spent...lol....

If you can I'd get with a tax specialist and ask about that. It does not sound right. Also, if not too personal, how were you contacted by the IRS regarding this alleged debt?
There are tax schemers out there that email and telephone tax payers in the states. Don't fall for that! The IRS WILL NEVER call you or email you.

If it is legitimate, I'd take all my paperwork, praying you have supporting documentation that can prove all that you've said here, and go to a tax preparer and see what's up.

Democrats on the campaign trail are promising the most ridiculous stuff just hoping to get into the primary. One question that always turned Sanders beet red was, "where's the money coming from?" When he'd also make outlandish promises regarding debt and monies.

If student loans are forgiven, who's going to actually pay those higher education institutions the back money owed if not those who contracted for the money for their education? Us!
And what about all those students prior that paid their debt in full? Do they get a full tax credit to that effect?
These are questions those Democrats who are making such promises should be held to the fire to answer. Not allowed to shuffle the questions off with polispeak and move on to the next topic.

They work for us. And sadly they've forgotten that.
Only we the people can remind them. Loudly and with conviction! Especially at the polls. Career politician should have never been allowed to be a thing. Term limits should have been put on all three branches of power from the start. We'd have a wholly different country if that were the case. The only reason the Executive branch, the President,office has a term limit in place is due to George Washington. He could have set for life had he not interceded in what promised to make America much like the monarchy of our former lands. Life term.
If he'd only have gone for the other two branches after. *sigh* Oh George, you silly goose. Did you foresee a Senator sitting the office till they were 99 and quite out of their mind? No, no you didn't. Now, we've had to. Bad George! Bad, bad.

Don't mean to be rude, but where is the honesty in not paying a debt that one has willfully made?
Is it proper as a Christian to not pay one's debts?

Is there anything wrong with having a debt forgiven? Or a debt lessened as to the true initial amount owed lessened to a more affordable debt?
If you have a mortgage and come into big money, you can call your mortgage lender and ask them the close out amount of your debt that day. This will be a substantially less amount owed than what your loan statement said during the last monthly report.
Are you not suppose to pay that lesser amount when the mortgage holder informs you that is what is owed at that point of your call?

$100K in student loan debt! Why? What happened to working to pay your way through college?

By the way, anyone who is forgiven any debt, is responsible for taxes on the amount of forgiven debt. If you have been the beneficiary of a debt forgiveness, you must report the amount on your tax return.

The Dems will indeed change the tax law if they have the chance to do so. They will raise it. There will be no government program to erase student debt but perhaps a way to lessen the hardship in the repaying process.

I suggest that you consider offering the IRS a settlement in the back taxes as they are usually receptive to proposed settlements. This could save you several thousand dollars. Look on the bright side, even though you owe $4823 dollars in tax you still saved $15,177. I would take that deal anytime.

There are many that face the same problem that you do with student debt. The best that you can hope for is that a law is passed to alleviate the financial burden by restructuring the loan but it will most likely never be totally eliminated as that is a financial arrangement that you agreed to. In the end, someone is going to have to pay and in all likelihood that burden is going to rest on those that carry the debt.

This may help.

Forgiven Debts and Your Taxes
Form 1099-C

At the time the constitution was written no one would have perceived that anyone would become a career politician because in reality at that time it was a part time gig. Congressmen and Senators would only be in Washington for a few days to a couple of weeks at a time to take care of the country's business and then they returned home to tend their farms or businesses. At that time what compensation they received was little more than what they would have to pay out of pocket for travel expenses and room and board while in Washington.

Originally Senators and Congressmen were compensated $6 for every day they were in Washington. I was curious so I did a little digging around to see what that would equate to today. Roughly it would equate to about $150 dollars a day today in other words, less than $20 an hour.

Actually the presidential term limit was not codified until the 22nd Amendment was passed and ratified by the states in 1951. Prior to then it was purely tradition that originated with George Washington refusing the nomination to a third term and that tradition was only crossed once by FDR who was the only President to serve a third term.