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D
darnellm OP
Aug 26, 2022 at 08:42 AM ET
10K debt relief question? Will those who get the relief have to pay taxes
On the 10K relief they receive?

14 Replies

ColoVT82 ColoVT82
I expect fed taxes - no. State taxability will vary.
H
Hoke
My question is how did they come up with the $125k income threshold?
Is it because they think anyone making less than $125k can't afford a $10k personal loan? If so -- that's absolutely mind boggling to me. Would have had less of an issue with the whole thing if the threshold was say $50k
S
soflahokie
They could've done it like he COVID payments, sliding scale based on income
Paying of $10k on $125k income is nothing even in a HCOL if you're young and not tied down. I would know since I paid off $100k on that income in Austin which is not a cheap place to live. That said the $10k relief is nothing compared to the repayment changes in the bill if you are someone who is struggling under a mountain of debt that's growing faster than you can pay it off. They really buried the lede on this one, but it is mid-terms and the $10k is the political flashpoint.
F
fordham
And it is 250k per couple. Which means prob over 90% of the pop is
Eligible
Tafkam Hokie Tafkam Hokie
Just guessing a bit, but they were probably fishing for an income number
that represented an upper boundary of "middle class," regardless of where you live. Sure, $125K is a heck of an income in SWVA. But if you live in NY or SF or Honolulu, I'm not sure that gets you into the top quartile.
`lag `lag
Yeah, I'm sure it's some offical statistic...
and yeah, expensive states vote for it only if it includes them like the state tax deduction thing.
F
fordham
It sure as hell should be taxable…. But you
Know it won’t be. Enjoy my tax dollars!!!! I have always paid my debts even in difficult times!!!!
Vtskier1 Vtskier1
It certainly awards the squirrels who didn't gather their nuts before
winter. In the big scheme it doesn't move the needle much either for the recipient. These bold claims of being able to now purchase a house are total BS. Those who believe the echo chamber are dumb as rocks. Even moderate leaning dems like Warner are scratching their heads. If I was in my low 20's working as a plumber or electrician or welder and never went to college, I'd be PO'd.
ElbertoHokie ElbertoHokie
But we live in a world where our deficit runs multiple hundreds of billions
each year. We aren't paying for things now and anyone thinks this going to change? It adds more numbers to a deficit that is increased by both left and right. The idea that we're all going to pay for this makes me chuckle when we aren't paying for a lot of spending. ** Edited by ElbertoHokie at 8/26/2022, 12:06:37 PM
Vtskier1 Vtskier1
Musical chairs. The music eventually stops and not all will have a seat
bigbadbird bigbadbird
unless there is another exception put in place- general answer is yes
forgiveness of debt is income - again - could be special rules in place- but just for the kicks i hope it is - because i want to hear the stupid people moan about a free 10K that cost them 2500 and listen to the outrage
Tafkam Hokie Tafkam Hokie
A potential there could be that the 10K was a loan scheduled to be paid
off over years at a really low interest rate. A $2500 tax bill is due, in cash, on tax day, or else. If you don't have that much readily available, that could be a problem. A good case could be made that a smaller debt to the IRS is WAY WAY worse than a larger student loan debt.
ElbertoHokie ElbertoHokie
There was an exemption put in place. I think that's how they're trying to
shoehorn this around congress. In that giant omnibus bill that was passed one of the provisions in it said that student loan debt relief is not taxable.
Vtskier1 Vtskier1
The 'ol omnibus bill to "fund the government" then load it with pork
This is how Pelosi got her insider trading back.... This is also how a digital dollar pilot got funded too.