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Although a loan doesn’t start out as earnings to the borrower, it becomes earnings to the borrower if the borrower is discharged of indebtedness.[11]:111[14] Thus, if a debt is discharged, then the borrower primarily has acquired revenue equal to the quantity of the indebtedness. The internal Income Code lists “Earnings from Discharge of Indebtedness” in Section 61(a)(12) as a supply of gross earnings.

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