Son’s Death Leaves Mom with Big Tax Bill on Forgiven Student Loan Debt | ABA Journal | Martha Neil | 9/19/12

Loan

Loan (Photo credit: Philip Taylor PT)

If a student loan borrower is unable to repay the money because he or she dies, that’s the end of the story, not only for the lender but the Internal Revenue Service, too.

However, if the borrower is the parent of the deceased student, then that’s a different story. After the suicide last year of Regina Friend’s son, who was a student at Temple University, both his student loans and the $55,400 she took out in ParentPlus debt were forgiven. But Friend was shocked this year to find out that the IRS expects her to pay a $14,000 tax bill because the forgiven debt is counted as personal income. Friend doesn’t have the money to pay that amount, and her tax preparer has applied for a filing extension, until Oct. 15. However, penalties for underpaid tax…

via Son’s Death Leaves Mom with Big Tax Bill on Forgiven 

Related coverage:

ABAJournal.com: “Report: Those 50 and Over Hold Almost 20 Percent of All Outstanding Student Loan Debt

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About vinhsu

Center City Philadelphia General Practice Law Firm with emphasis on Criminal Defense, Family Law, Immigration, Real Property, and Wills/Trusts/ Estate Planning. Licensed in Pennsylvania and New Jersey.
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3 Responses to Son’s Death Leaves Mom with Big Tax Bill on Forgiven Student Loan Debt | ABA Journal | Martha Neil | 9/19/12

  1. Darlene says:

    Thanks again for keeping me abreast of all the things a lay person would never know!!!!

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