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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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