quishiclocus wrote:From here:
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
So. If you do end up in a position later in your life where they're forgiving an amount of debt that is massively more than what you have, it *won't* all become taxable. That does not, however, preclude the possibility of having to mortgage/sell major assets in order to become more liquid to cover your taxes.
Just FYI, for anybody who wasn't aware of that provision of the debt forgiveness tax rules.
(This is not tax advice for your personal situation, I am not your tax preparer, etc, etc, etc, etc.)
Um, this isn't about IBR at all. It's about mortgage debt cancellation. The article also specifically defines debt cancellation as involving commercial lenders.
Does anyone have an official (federal) link that says that there are tax consequences to IBR?