Is cancellation of debt, 1099-C exempt if it was for student debt (parent plus loans) for my son that passed away in June 2017?

[Carl]

I'm sorry for your loss. Were you or anybody else a co-signer on that loan? Whose SSN is on the 1099-C?

[Opus 17]

Said parent loan.

[4sandifers]

It was a parent plus loan so my SSN (mother) was on it.

[Opus 17 · Accepted solution]

Unfortunately, most cancelled debts are considered taxable income, and this is not one of the exceptions.  You weren't taxed on the money when you got it, so now that you get to "keep" it (or the benefit of having received it) you owe income tax.

While death of the student is a reason to cancel the debt (most student loans debts are not cancellable even in bankruptcy), the only exceptions for reporting the debts as income are work-for-forgiveness programs.

https://www.irs.gov/taxtopics/tc431