Loan Forgiveness Available for Qualified Student Loans
In case you missed it last year, the Internal Revenue Service (“IRS”) issued a revenue procedure (“Rev. Proc.”) that offers loan forgiveness to certain federal student loans. Rev. Proc. 2015-57 addresses tax implications for the discharge of student loans under the “closed school” and “defense to repayment” processes. Under the guidance, qualifying taxpayers can exclude from their income student loans discharged under either process. In addition, any prior-year deductions and/or tax credits a taxpayer receives under Rev. Proc. 2015-57 are not added back to the gross income and/or tax liability during the year the student loan is discharged.
More on Rev. Proc. 2015-57 is available at The Journal of Accountancy.