The IRS has set many tax deductions and benefits in place for individuals. Unfortunately, some taxpayers who bring home a advanced level of income can see these benefits phased out as their income ascends. Debt forgiveness, you see, is treated as taxable income. Why? Within a nutshell, if a person gives serious cash and on pay it back, it's taxable. Like you have pay out taxes on wages from a job. A division of the reason that debt forgiveness is taxable is really because otherwise, it would ...