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Part $1$

Do you agree or disagree with the following$$ statement: A taxpayer should not have to report income when debt is forgiven because the taxpayer receives nothing. Explain.

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Part $1$

A$.$

Disagree. The forgiveness of debt does result in an indirect economic benefit as the debtor is only allowed to be relieved of$50\%$ of the total obligation.

B$.$

Agree. The forgiveness of debt does not result in an indirect economic benefit as the debtor receives no financial benefit for the obligation.

C$.$

Disagree. The forgiveness of debt does result in an economic benefit as the debtor is relieved of the obligation but this is only allowed once in a lifetime.

D$.$

Disagree. The forgiveness of debt does result in an economic benefit as the debtor is relieved of the obligation to make future payments.