Melissa L. Moloney - Page 11

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                    (3) Exception for Discharges on Account of                        
               Services Performed for Certain Lenders.–-Paragraph                     
               (1) shall not apply to the discharge of a loan made by                 
               an organization described in paragraph (2)(D) if the                   
               discharge is on account of services performed for                      
               either such organization.                                              
               Petitioner’s reliance on section 108(f) is misplaced.4                 
          Income from the discharge of indebtedness is includible in gross            
          income.  Sec. 61(a)(12).  Section 108 provides certain exceptions           
          to that treatment.  Section 108(f) entitled “Student Loans”                 
          establishes certain circumstances under which income from the               
          discharge of a student loan may be excluded from gross income.              
          In no event may section 108(f) apply unless there is in fact a              
          discharge of a student loan.  In the instant case, petitioner               
          received petitioner’s LARP award of $4,372.  That award was to              
          be, and was, used by petitioner to repay a portion of                       
          petitioner’s law school loan.  Petitioner’s LARP award did not              
          discharge petitioner’s law school loan or any other student loan            
          that petitioner may have had.5                                              

               4Petitioner’s reliance on the “CCH Explanation of Section              
          108(f)” also is misplaced.  That explanation is not binding on              
          the Court.  It merely represents the views of the publisher of              
          the publication “CCH Standard Federal Tax Reporter”.                        
               5Assuming arguendo that petitioner’s LARP award of $4,372              
          were to constitute a discharge of a portion of petitioner’s law             
          school loan, sec. 108(f)(1) would not in any event permit                   
          petitioner to exclude that award from her gross income for 2002.            
          That is because, as petitioner acknowledged at trial,                       
          petitioner’s law school loan did not contain provisions “under              
          which all or part of the indebtedness of the individual would be            
                                                             (continued...)           





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