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Debt forgiveness, you see, is treated as taxable income. Why? In a nutshell, community gives you money and you will not pay it back, it's taxable. Everybody else have to pay taxes on wages off of a job. A member of the reason your debt forgiveness is taxable is simply because otherwise, end up being create an enormous loophole each morning tax password. In theory, your boss could "lend" you money every 2 weeks, and also at the end of the age they could forgive it and none of it would be taxable.
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