Banking > Cancellation Of Debt - COD

When a creditor forgives a debt without requiring consideration in return. The amount of debt that is forgiven by cancellation of debt is considered income to the debtor and must be reported as a result. In most cases, it is taxable as ordinary income and is known as cancellation-of-debt (COD) income.

In some cases, this debt is from one country to another and is partially or fully wiped away to help rebuild the nation.