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the Denise W was repossessed and sold by the commercial lender to
satisfy the unpaid loan amount. The BIA in 1993, pursuant to its
loan guaranty, paid lenders a total of $13,506.88, of which
$5,589.45 was applied to principal and the balance to interest.
For the year 1993 petitioner was sent a Form 1099-G from the BIA
reporting income in the amount of $13,506 from the "discharge of
indebtedness". Petitioner did not file a Federal income tax
return for the year 1993.
The parties agree that petitioner is entitled to one
personal exemption and a standard deduction based on married-
filing-separate status for the year 1993.
Discussion
It is petitioner's position that the income from discharge
of indebtedness he received in 1993 is not subject to tax because
it is income derived by an Indian from the exercise of fishing
rights under section 7873.
Section 7873 provides in relevant part:
SEC. 7873(a). In General.--
(1) Income and self-employment taxes.--No tax
shall be imposed by subtitle A on income derived--
(A) by a member of an Indian tribe
directly or through a qualified Indian
entity, or
(B) by a qualified Indian entity,
from a fishing rights-related activity of such tribe.
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