Cancellation of Debt Income for medical expenses
I am having trouble finding an answer whether cancellation of debt for medical expenses is taxable income. There is no bankruptcy or insolvency exclusion available. Does the exclusion provision that the expenses would have been deductible medical expenses apply only if they exceed 7.5% AGI threshhold even if the taxpayer would still have not been able to itemize? In other words, to qualify for the exclusion, do the expenses actually have to have led to a net tax benefit to qualify for the exclusion of income? ( expenses and COD occurred in the same year 2025 so they have never been paid or deducted)
Thank you.
