Deb has found it very difficult to repay her loans. Because of these difficulties, the bank decided to forgive one of her most recent loans, an amount of $45,000. After the loan was discharged, Deb had total assets of $232,000 and her remaining loans total $217,000. What amount must Deb include in her gross income?

A) $15,000

B) $45,000

C) $30,000

D) $28,000

E) Zero - Deb was not solvent when the loan was discharged

A) $15,000

Explanation:

Data provided in the question

Total assets = $232,000

Amount of her remaining loans = $217,000

Forgive amount of loans $45,000

After considering the above information, the amount included in her gross income is $15,000 which is a difference between the total assets and the amount of her remaining loans i. e

= $232,000 - $217,000

= $15,000

Moreover, in the case of insolvent, the amount should not be taxable if it is discharged while it is before or after the forgiveness

And if it is the case of solvent, the same is to be taxable to the limit of the solvency