loan for moving expenses

[k man]

let’s say an employer lends money to employees so that they can pay moving expenses. When they work with the employer for a certain amount of time the forgive the loan. The employer reflects the cancellation of indebtedness on the employee’s w-2. the plan excludes fringe/moving expenses from compensation. Do you think the cancellation of indebtedness is a fringe benefit? In my view it is not reimbursement of a moving expense because of the fact that it was a loan originally.

[J Simmons]

The debt forgiveness (sec 108) seems lto be more like a taxable retention bonus after the requisite time passes than truly a moving expense. The employee doesn't receive the debt forgiveness just because he moved to take the new job. He receives the debt forgiveness for staying on the job for so much time.

[masteff]

But it's not eligible for a CODA because there's no cash element (or if there was, it was in the past).