Several years ago, a family member was able to have their student loan discharged due to health/disability. When it came time to file the tax return for that year, they did not receive a 1099 for the amount discharged, but still claimed it on their taxes as income. They recall checking a box in Turbo Tax stating that a 1099 was not received. Well, jump to 2020 and their health improved. They were able to return to school and receive a new student loan with documentation from their doctor stating they were able to return to school / seek employment. They attended online college classes in 2020 utilizing their new student loan. It is their understanding that the amount that was discharged several years ago will be reinstated and added to the new loan. Just like several years ago, no 1099/equivalent for the amount reinstated (or to be reinstated) was received for 2020. Since the amount that was discharged was taxable in the year that the discharge occurred, wouldn't it be deductible when it was reinstated in 2020? Or, would it be when they need to begin making loan repayments? How do they deduct/report if they never receive a 1099?
