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18 June, 00:53

Which of these cancellations of debt would be includable in income?

Recourse debt.

Nonrecourse debt.

Debt cancellation intended to be a gift.

Purchase price reduction.

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  1. 18 June, 01:07
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    Recourse debt.

    Explanation:

    Cancelled recourse debt are included as income and are taxable. Taxpayer get the benefit for using the money but does not have burden to repay the amount. These are mainly, prizes, awards on winning any contest etc. Debt which are forgiven or cancelled by lender are considered as Income and taxable. The law say that income from discharge of indebtness are included as income.
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