I'm answering this presuming there is no difference in Student Debt to regular...and i can't see why there should be:
Any amount below the amount you owe, that includes all charges, is considered a cancellation of debt. COD is taxable income. However, presuming the debt was owed to an actual lender, they should/will/must provide you with a 1099 that shows how much income you received for the COD. If it was just completed (anytime in 2006) you probably won't get this until Jan of 2007.
I'm pasting a long discussion below that I made concerning charge offs and forgiveness of debt, originally concerning a tax question.
A charge off (or write off) is the accounting process where a business acknowledges a receivable (an asset) it believes is uncollectable effectively does not exist. It is taking the cost of not collecting that receivable as a charge against current earnings. Hence the companies net current earnings is lower than they would have been and subsequently, the amount of income taxes they pay is also lower. IMPORTANT: It does not mean the debt is forgiven, just that they can�t collect it, or some portion of it. (See below).
They had an increased expense, made less money, they pay less taxes. It�s fair to say given a choice they would have preferred to have made the less net income by increasing say, salaries, medical benefits, advertising, new machinery, etc. Than essentially giving away their assets/earnings to someone else.
Taking a $100 sale on credit, the company shows the $100 as income on its income statement when the sale is made and, as no cash was received, reflects it by establishing a $100 asset (due from customer) on its balance sheet. If the transaction is completed, as the customer pays the balance sheet cash account is increased by the $100, and the due from customer account is decreased � no income effect (as that was recognized with the original posting).
So, say a company sold $100 in year 1, reported the income (through the income statement) and paid taxes on it and establishes an asset for the receivable. Then in year 2 finds that customer isn�t going to pay, it will have a charge of -$100 in year 2 (reducing the balance sheet asset account, with offset to the income statement), effectively recovering the taxes it paid in year 1.
While this seems fair there are, not suprisingly, a number of accounting, especially IRS tax accounting rules, that complicate it and it is not unusual at all for a company to not receive a complete or timely benefit for all of it�s charge offs. The tax rules for when an asset can be charged off are stricter than accounting). And for there to really be any benefit, the company must actually be making enough money on a tax basis in all those years. It must have taxable income and a tax it would have had to pay. If it was already losing money, paying little or no tax, losing more doesn�t get it more! But also at the State level where, the taxable income need is even greater, but another tax is frequently encountered. If that $100 also had say $6 sales tax collected and paid over to the State, the state makes recovering that $6 that was in reality never collected, very difficult, near impossible. (Note that the $6 is normally NOT part of the company�s income or sales but a collection in trust for the State and paid over on behalf of the customer). I think you would be hard pressed to call the above a benefit! The one not paying (who still owes and will forever owe the money), actually receives all the benefit, by basically enriching themselves through a theft. (Walking out and agreeing to pay, then not doing so is really very similar to simply walking out with out paying).
However, there is another consideration: What happens if the debt (or some portion) is forgiven?
Lets start with a basic tax concept: If you receive something of value (remember we�re talking in business, so from someone other than family), you have received a taxable income. (The one giving it rightfully has an expense). For example, remember the Oprah Winfrey thing where the audience got cars�and then found out they owed taxes on the value of the cars. In fact, when Oprah stepped up to pay the tax for them, she had to actually pay more than the tax on the car, (called a gross up), as the money she gave them to pay the tax is also taxable.
Hand in hand with that, and the example above, if you get a loan, it is NOT taxable income. The money was exchanged for the equally valued promise to repay.
So taking the example above, if a buyer receives the $100 merchandise and gives $100 value for it, obviously nothing income taxable to the buyer. But in this case the buyer receives the $100 of value and say makes a deal in year 2 that if the $100 promise it gave is forgiven for a payment of $75 sent today (frequently offered with words like ��because it�s all I have and otherwise you ain�t getting nothing�.�), then the $25 is considered a cancellation of indebtedness. COD income is taxable to the recipient. It isn�t a loan/exchange of value anymore, it�s a gift of value, and value, as in Oprah is taxable. While no one likes to pay tax, it is the correct outcome. The advantage is the debtor doesn�t owe anything anymore�other than tax on the gift.
This COD is a very big issue in major corporation financial reorganizations. When these companies financially restructure (Chapter 11 Bankruptcy), and creditors, generally Bondholders, agree to take less than the bond was issued for�and we are talkin
A yield to maturity is the internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.
internal contract is a contract that exists between the principal and agent. external contract is a contract that exists between the principal and a third party.
external auditors focus primarily on controls that affect financial reporting. External auditors have a responsibility to report internal control weaknesses (as well as reportable conditions about internal control)
which greek philosopher showed an interest in internal human traits
he is cool
his biggest conflict is the internal conflict of whether to turn jim in or not
Cu alu internal buses
Upper and lower epidermis, stomata and mesophyll consisting of palisade, spongy paenchyma and vascular bundles.
internal liability mean that company will pay salary, so salary is internal liability, and the company will pay interest to bank it is external liability.
Typically they are. Any employee with a vested interest in a company is an internal stakeholder, which typically includes the CEO and the board of directors.
Internal: Employees External: Customers, and suppliers.
the sun- all the plants need it or photosynthesis and animals need it for oxygen.
Internal stakeholders have a vested interest in the companies that employ them because they have a share in the company's profits (and losses). They have invested within that company, therefore it is in their best interests to ensure the company performs well. This is why many companies offer shares to all their employees.
People who are employed or owned by a business, organisation or project who have a vested interest in the business (such as owning company shares) are internal stakeholders. Internal stakeholders can include any employee, from the CEO down to the workforce.
Sheep Pluck is a collection of Sheep organs, usually consisting of the heart, liver and kidney, but may also include other internal organs.
The total amount of debts payable by a business to its owners are called internal liabilities e.g., capital.Example-For a company Internal liability mean that company will pay salary, so salary is internal liability, and the company will pay interest to bank it is external liability.
It would depend on the jurisdiction as to what spills are reportable. Small spills on site, in the catchment areas of waste control systems are not usually reported except on internal incident reporting systems. These reports may be available to internal or external auditors. Larger or external spills are usually reported. In jurisdictions where spills must be reported to the government or to industry associations, all companies would have reportable spills during any given year. These would range from a few liters of gasoline at service stations to multi tonne spills from vessels or pipelines.
During the 18th century (1700's) there were only internal strifes consisting of warring dynasties within Vietnam.
The voltage of the battery, and the resistance of the circuit (including the resistance of the wire and the internal resistance of the battery).
In The Most Dangerous Game, General Zaroff has lost his interest in hunting animals. He no longer feels it is challenging or worthwhile. His internal conflict is whether he should continue something that holds no interest for him, or raise the stakes by hunting humans, something that would be more challenging.
It covers the interests of spouses excluded from a gross estate. It states, in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest.
External auditing process Internal auditing process Internal controls Conflicts of interest (code of corporate conduct, fraud presentation) Financial reporting process Regulatory and legal matters
Money deposited in an interest bearing account has a rate of return. the institution will take that money and reinvest it so they can make money off of it as well.This rate of return on the internal investment is the internal rate of return, which is usually higher than that paid to the original investor.
The new policy is fraught with problems and loop holes. The new principal will take charge of a student body fraught with behavior problems and internal conflicts.