Debt Forgiveness I have a client with a large hospital bill, of which some of the debt was forgiven. I know that debt forgiveness is generally income. However, the code states (sect 1391) "But if the debtor's payment of the liability would have given rise to a deduction, the debtor won't have income from the discharge."
Since medical expenses are an itemized deduction, can I correctly assume this should not be treated as income? I am looking for a confirmation or a 2nd opinion.
Thanks as always for the help! |