[ThomasGokey]

My understanding is that this is different than a COD. From the perspective of the credit reporting agencies it will be considered the same thing as paying the debt in full. From the perspective of the government it will just look like someone paid their debt, not that they got extra money. But I'm not a tax expert or lawyer, this is just my best understanding after talking to a lot of people about it.

[smsm42]

I'd suggest you hire one, because it certainly looks like what IRS would consider income. If somebody - no matter who - forgives a loan for you, it is considered income. Otherwise nobody would pay any income tax as they would not have any income - they'd just have some loans that by some miracle are regularly forgiven. Every employer would have a loan forgiveness program instead of salary. I don't think IRS can be cheated as easily as that.