2020, Devorah made a wedding for her favorite child, Michal, and ran up a $100,000 debt on her credit card for the caterer, the band and the catering hall and she was unable to pay it or her other debts. She negotiated with the bank regarding her credit card debt and they forgave all but $30,000, which she promised she would pay within 2 years. Her total debt before

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter3: Income Sources
Section: Chapter Questions
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In 2020, Devorah made a wedding for her favorite child, Michal, and ran up a $100,000 debt on her credit card for the caterer, the band and the catering hall and she was unable to pay it or her other debts. She negotiated with the bank regarding her credit card debt and they forgave all but $30,000, which she promised she would pay within 2 years. Her total debt before the settlement was $120,000 and her assets were $60,000.

How much income must Devorah recognize as a result of the debt forgiveness?

 

 

Group of answer choices

$60,000

$0

$30,000

$70,000

$10,000

 

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