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Answer the following: a. Under what conditions is the discharge of indebtedness not taxable? b. If a father forgives a daughter's debt to him, is she required to include such amount in her gross income? a. Under what conditions is the discharge of indebtedness not taxable? (Identify five conditions in which the discharge of indebtedness is not taxable.) Conditions of non-taxable discharge of indebtedness 1. 2. 3. 4. eme 5. b. If a father forgives a daughter's debt to him, is she required to include such amount in her gross income? OA. A father's forgiveness of a daughter's debt will create a discharge of indebtedness to the daughter only if the amount forgiven is more than 50% of the amount originally borrowed. This amount must be included in the daughter's gross income. OB. A father's forgiveness of a daughter's debt becomes a discharge of indebtedness to the daughter and becomes taxable. The daughter must include this amount in her gross income. OC. A father's forgiveness of a daughter's debt may be motivated by reasons such as love and affection. As a result the forgiveness may be a gift and excluded from gross income. OD. A father's forgiveness of a daughter's debt will typically be included as taxable income to the daughter. However, if the daughter becomes bankrupt or insolvent, the debt will be excluded from her gross income.

Answer the following: 2. Under what condifions is the discharge of indebtedness not taxable? b. If a father forgives a daughter's debt to Nim, is she required to include such amount in her gross income? a. Under what conditions is the discharge of indebledness nol taxable? (ldentaly five condtions in which the discharge of indebtedness is not taxabie) Conditions of non-taxable discharge of indebtedness 1. 2. 2. 4. 5. b. It a father forgives a daughter's debt to him, is she required to include such amount in ber gross inoome? A. A fathers forpiveness of a daughiers debt will create a discharge of indebtedness to the daughter only if the amount forpinen is more than 50% of the amount orighaly bortoned. This amount must be included in the daughter's gross income. D. A father's forpiveness of a daughter's debt will typicaly be included as taxable incame to the deughter, However, X the dauphter becomes banknpt or insolvert, the debt wil be excluded from her gross income

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