Help, Why is my Cancellation of my Farm Debt Taxable

Many distressed farmers have received cancellation of debt from USDA. In many cases, some or all of this debt is taxable.

Photo by Michael Robillard on Unsplash

The Inflation Reduction Act created new assistance for distressed farm operations. Under this assistance many distressed borrowers had some or all of their debt issued or guaranteed by USDA forgiven.

Many farmers assumed that this debt is tax-free, however, in many cases, it is not.