Federal Tax

Discharge of Indebtedness, Bankruptcy and Insolvency (Portfolio 540)

  • This Portfolio examines and analyzes the tax treatment of individuals, corporations, and partnerships that realize discharge-of-indebtedness income, inside or outside bankruptcy.

Description

Bloomberg Tax Portfolio, Discharge of Indebtedness, Bankruptcy and Insolvency, No. 540, examines and analyzes the tax treatment of individuals, corporations, and partnerships that realize discharge-of-indebtedness income, inside or outside bankruptcy, whether or not the person realizing the income is insolvent. It also considers the tax treatment of individuals, corporations, and partnerships that have become insolvent and, as a result, are subject to the provisions of the federal bankruptcy laws or state laws applicable to receiverships.

The Portfolio discusses the tax treatment of debt discharge, including the exclusion of debt discharge from gross income and the corresponding reduction of tax attributes under §108; the tax treatment of the bankruptcy estate of individuals entering bankruptcy under Chapter 7 or 11 of the Bankruptcy Code, including the transfer of tax attributes to and from an individual’s bankruptcy estate under §1398(g); the tax-free reorganization of corporations in a Title 11 or similar case; the special tax problems of financially troubled corporations; and the tax treatment of financially troubled partnerships.

Table of Contents

I. Introduction
II. Discharge of Indebtedness
III. Bankrupt Individuals and Their Estates
IV. Corporations
V. Partners and Partnerships
VI. Procedure

William Tatlock
William Tatlock
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