- 10 - (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...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011