COD Information Reporting Rules Finalized

Article:  The IRS issued final regulations regarding information returns for cancellation of indebtedness by certain entities.
Published on January 28, 2011

Impact of Anticipated COD Income on Investors Joining Existing Partnerships

Article:  When appreciated property is contributed to a partnership, the precontribution gain is accounted for under Sec. 704(c), which provides that income, gain, loss, and deduction for property contributed to the partnership by a partner are shared among the partners so as to take account of the variation between the basis
Published on January 28, 2011

IRS Provides Guidance on Election to Defer COD Income

Article:  The IRS has provided guidance to taxpayers on how to make the new election to defer recognizing cancellation of debt (COD) income under Sec. 108(i
Published on January 28, 2011

Should a Company Elect to Defer Cancellation of Debt

Article:  The American Recovery and Reinvestment Act of 2009 provides certain business debtors with a cancellation of debt (COD) income deferral election under new Sec. 108(i) for reacquisitions by the debtor or by certain related parties of applicable debt instruments after December 31, 2008, and before January...
Published on January 28, 2011

Restructuring Partnership Debt May Create Unexpected Results

Article:  A partnership or an LLC taxed as a partnership contemplating a debt restructuring should carefully consider the tax effects of Sec. 108.
Published on July 13, 2012

Tax Planning for Troubled Debt

Article:  Today’s volatile real estate environment presents interesting opportunities for investors and developers to alter the terms of their debts in ways that may pay off if they can retain control of their projects.
Published on January 28, 2011

Tax Ramifications of a Foreclosure A Debtors Perspective

Article:  The tax ramifications of a foreclosure, from a debtor’s perspective, can best be understood by first exploring the general approach to determining the tax treatment of any particular debt forgiveness event. This approach begins with a twostep process. The first step is to divide the debt into two components: (1)
Published on January 28, 2011

Discharge of Indebtedness Conversion vs. Contribution of Indebtedness

Article:  In an effort to de-leverage, more and more creditors, particularly those also holding an equity position, are willing to accept repayment for less than the face amount of the debt. Apart from settling the debt in cash for less than its face value, there are other methods debtors and creditors
Published on January 28, 2011

Sec. 1245 Recapture Rules Can Apply to Stock

Article:  This item discusses how a reduction in a debtor’s stock basis through application of the Sec. 108 attribute reduction rules can result in Sec. 1245 recapture on a disposition of that stock. It also examines how the consolidated return rules in certain circumstances eliminate, in whole or in part, the
Published on January 28, 2011

Exclusion for Income from Discharge of Indebtedness Mortgage Debt Forgiveness

Article:  The Mortgage Forgiveness Debt Relief Act of 2007 provides an exclusion from income for the discharge of indebtedness (DOI) on a qualified principal residence. The exclusion is effective for home mortgage debt discharged between January 1, 2007, and December 31, 2012.
Published on January 28, 2011

Effect of Debt Recharacterization on Worthless Securities Deductions

Article:  The IRS recently addressed concerns that the recharacterization of intercompany debt as common equity might prevent a worthless securities deduction.
Published on January 28, 2011

Debt Restructurings in Todays Private Equity Environment

Article:  Deals that are taking place today bring with them many technical tax considerations that were seen much less frequently during robust economic times.
Published on January 28, 2011

Current Developments in S Corporations (Part I)

Article:  This two-part article discusses recent legislation, cases, rulings, regulations, and other developments in the S corporation area. Part I covers operational issues; part II, in the November issue, will cover S corporation eligibility, elections, and termination issues.
Published on January 28, 2011