Will all these student loans being forgiven be reported to the IRS as "forgiveness of debt"? If not, wouldn't there be a class of taxpayers that are being discriminated against? Thousands of people have to report the income on "forgiveness of debt" due to reductions in debt owed. Shouldn't the students whose loans are forgiven be required to do the same?

All of Biden's previous unconstitutional student debt transfer plans included a provision that no federal income taxes would be owed. State taxes are a different matter.

Forgiven student loans are usually taxable, unless they are forgiven under the Public Service Loan Forgiveness program or the Teacher Loan Forgiveness program.

The American Rescue Plan Act in 2021, however, exempted federal forgiven student loans from taxes until December, 2025.

Martin Cash said:

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All of Biden's previous unconstitutional student debt transfer plans included a provision that no federal income taxes would be owed. State taxes are a different matter.

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That's federal, Congressionally passed law.

Is that not discrimination against others who have had forgiveness of debt? Is this a case that could be brought to the supreme Court since Congress did not authorize it?

Forgiveness is not taxable until 2026 per heroes act I think.

Shoefly! said:

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The release of debt should be taxed as a gift.

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Gifts are not taxable. However, forgiveness of debt is sometimes taxable.

combat wombat said:

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Shoefly! said:

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The release of debt should be taxed as a gift.

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Gifts are not taxable. However, forgiveness of debt is sometimes taxable.

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Below a certain level yeah, but they are definitely taxable above that level.

No, CW is correct.

Ham Slice MRE said:

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No, CW is correct.

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So you're saying if someone gives me a million bucks out of the goodness of their heart, the IRS is gonna say no big deal and carry on?

What he is saying is that the IRS set a threshold for gifts. The last time I looked at it a few years back, it was $12,500 for family members. So a father who had a married daughter could give that daughter $12,500 and his son-in-law $12,500, and the government couldn't do a damn thing about it.

However, if he gave them 25,000 each, for a total of $50K, then the IRS would tax the crap on that additional $25K.

It is why, if they are able, people are not waiting to divide up inheritance when they die but instead give a little each year so that the ITS has job claim on it later.

FrecklesDad said:

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Is that not discrimination against others who have had forgiveness of debt? Is this a case that could be brought to the supreme Court since Congress did not authorize it?

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Yes it is discriminatory. Thats why those affected negatively hate this

Sims said:

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Ham Slice MRE said:

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No, CW is correct.

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So you're saying if someone gives me a million bucks out of the goodness of their heart, the IRS is gonna say no big deal and carry on?

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The person receiving a gift is never taxed, whether it is $1 or $100,000,000. The donor may be subject to a gift tax based on how much he or she gives. With student loan forgiveness, the donor is not an individual, so would not be subject to a gift tax.

So yes, that is what they are saying.

If you receive federal student loan forgiveness, the issuing university should have to reimburse the taxpayers....or the borrower should no longer be eligible to vote.

I think I could support either option.

FrecklesDad said:

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Is that not discrimination against others who have had forgiveness of debt? Is this a case that could be brought to the supreme Court since Congress did not authorize it?

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Congress didn't authorize what?

Congress made forgiven loans non-taxable until 2025. There's nothing unconstitutional or "discriminatory" about that. They change tax laws every year. They change all sorts of laws every year.

Congress also created PSLF and Teacher Forgiveness and authorized the creation of payment plans that lead to forgiveness after so many years. Trump and every recent President has forgiven lots of loans per their authority under Congress. The SCOTUS case was about one particular plan from Biden in which they determined he was overstepping his authority.

Gifts received are not taxable to the recipient.