Here is the deal looking at it from the lender's side. They wrote off $40K, and will include that loss on their tax return. In other words, it was a business expense that reduces their net profit. So the IRS says: "If you had an expense, did someone else gain?". Well as a matter of fact the borrower gained the $40K they were obligated to pay. So it was technically income to the borrower, even though the money was paid when the borrower originally took out the loan. It magically transformed from a loan to income when the lender wrote off the debt.
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Today's Featured Article - Piston Ring Removal and Replacement - by Chris Pratt. Piston Ring Removal and Replacement - Replacing rings is a fairly easy process to stretch the engines usability between major rebuilds and cut down on that blue smoke and high oil consumption. Frequently, replacing only the rings is not advisable because by the time you do the teardown and measurement of the components, the pistons are often beyond the manufacturers specification or something else you find will signify the need for a major rebu
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