If a company forgives a debt that an employee owed the company, as far as tax is concerned, would it be considered a gift from the company or an income to the employee and a deduction for the company?
Estate Planning Attorney
A company cannot make a gift to a person (only to a charitable organization); it may be a "bonus", but whatever way you look at it, it is taxable income to the employee. And, yes, forgiving a debt is income.
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