Debt Discharge


DEFINITION of 'Debt Discharge'

The cancellation or forgiveness of a debt. Debt discharge results in taxable income to the debtor unless the forgiveness is a gift or bequest.

BREAKING DOWN 'Debt Discharge'

When a debt is discharged by an institution, the debtor will usually receive a Form 1099-C that shows the amount of debt forgiven. The debtor must then report this as miscellaneous income on the 1040.

  1. Debt Relief

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  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
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    A debt that is not collectible and therefore worthless to the ...
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    The cash that is required for a particular time period to cover ...
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