Question

Deb has found it very difficult to repay her loans. Because of these difficulties, the bank decided to forgive one of her most recent loans, an amount of $45,000. After the loan was discharged, Deb had total assets of $232,000 and her remaining loans totaled $217,000. What amount must Deb include in her gross income?

Answer 1

$15,000

Step-by-step explanation:

Total Assets-Remaining liabilities=Solvency

$232,000-$217,000=$15,000

If the waiver of loan makes the taxpayer solvent,then the extent by which he is solvent will be included in his/her gross income.