My university forgave my debt as a gift.

Forum|Forum|3 years ago
January 24, 2023
1 reply
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Last year around Easter, my university, as part of a jubilee celebration, forgave my debt and allowed me to get my diploma. Now, I know that debt forgiveness is taxable in some situations, but I was wondering how to best approach this in doing my taxes this year. On the surface it seems like a gift, but I want to make sure that I file correctly.

I still owe federal loans (which are in limbo due to the COVID-19 relief plan), but in this specific instance, should I report the forgiveness just to be safe?

Not A Product Question

MinhT1

The American Rescue Plan provides relief to students with government and federal student loans by allowing students with forgiven loan debt to exclude the discharged debt from their taxable income for tax years 2021 through 2025.

If your student loan forgiveness qualifies, then you do not report the form 1099-C on your tax return.

Please read this TurboTax blog for more information.

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