If the loan is forgiven, you will either report the income on your return and take a deduction for the expenses that they paid OR you will not report the income and you will not take a deduction for the expenses that they paid.
If the loan or any portion of the loan is not forgiven then The unforgiven portion is income and the expenses they paid are deductible as well as the interest you pay on the loan. And the forgiven portion is handled as already mentioned above.
