Does a taxpayer have taxable income from debt that was canceled in a decedent's will?

The answer is No (with no qualifiers). That's what I answered for a tax test and it was correct.

I'm not sure what the above relies on other than not being marked wrong.

cancellation of debt is income.

If it is cancelled by the estate of a decedent it would be taxable just as if he was alive, or maybe more descriptively, as if he gave the recepient that amount in the will. (As inheritance is generally taxable). Certainly there are many qualifiers as in any tax consideration.

Consider how foolish any other result would be: Someone gets a 100K bequest - taxable. His brother gets the same, but collects it earlier as a loan, and now it is in the will to forgive the loan. The next brother got it earlier, with no actual loan note nor forgiveness...hence it was "gift taxable" AND reduced the exclusion for lfetime gifts.