indebtedness income

• Commentary: Insult to Injury: Discharge of Indebtedness Income

In these troubled times, businesses and individuals find themselves overloaded with debt as asset values and income levels decline. Methods such as refinancing, workouts and short sales are being used to restructure debt and relieve liability. While the debt may be eliminated or reduced to a tolerable level, an additional, unplanned expense may be on the horizon: income taxes resulting from discharge of indebtedness income. The Internal Revenue Code requires taxpayers to include amounts from the discharge of indebtedness in gross income. Generally, a taxpayer may receive income from discharge of indebtedness when a debt or other liability is discharged, forgiven or otherwise reduced for inadequate consideration or none at all. For example, if real property is sold for less than the bala...

• Daily Journal of Commerce
• January 22, 2010

• Gross Income Exclusion For The Discharge Of Indebtedness On Principal Residences.

For most of the U.S., 2007 marked the beginning of the financial crisis and the rapid decline in the U.S. real estate market. During the first half of...

• Mondaq Business Briefing
• Nbr. 2011, January 2011

• 2009 Tax Act Provides Relief From Cancellation Of Indebtedness Income

Mr. Rubinger is based in our Fort Lauderdale office. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 20...

• Mondaq Business Briefing
• United States Law Articles in English

• 2009 Tax Act Provides Relief From Cancellation Of Indebtedness Income.

Mr. Rubinger is based in our Fort Lauderdale office. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009...

• Mondaq Business Briefing
• Nbr. 2009, January 2009

• Income taxes: Consolidated return regulations— Section 108 application to consolidated group members; indebtedness income discharge,

• FR, March 22, 2005
• Rules
• Internal Revenue Service

• Gross Income Exclusion For The Discharge Of Indebtedness On Principal Residences

For most of the U.S., 2007 marked the beginning of the financial crisis and the rapid decline in the U.S. real estate market.  During the first half o...

• Mondaq Business Briefing
• United States Law Articles in English

• Is Income From Discharge of Indebtedness Really Income at All? A Proposal for a More Reasoned Analysis

Musselman traces the judicial history of the concept of income from discharge of indebtedness, identifying and discussing the opinions and rationale that the courts have so far offered for this concept. He then reviews and discusses relevant commentary regarding the theoretical basis and application of the concept.

• University of Memphis Law Review, The
• Vol. 34 Nbr. 3, April 2004

• The current status of reporting discharge of indebtedness income.

IRS temporary regulations issued in Dec 1993 identify what constitutes cancellation of indebtedness subject to income taxation, and the IRS announced an amnesty period for failure to report cancellation of indebtedness income until the final regulations are issued. Agreements between creditors and debtors that reduce liability, as well as claims forgone and mandated cancellations must be reported. The regulations detail the information that must be reported on IRS Form 1099-C.

• The Tax Adviser
• Vol. 26 Nbr. 1, January 1995

• Temporary Deferral Of Cancellation-Of-Indebtedness Income Under The Recovery And Reinvestment Act Of 2009.

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the "Act"). Among its provisions, the Act pe...

• Mondaq Business Briefing
• Nbr. 2009, January 2009

• Federal Tax Update

The Emergency Economic Stabilization Act of 2008 made several significant changes to the US tax structure. The Act increased slightly the alternative minimum tax exemptions for 2008 to $46,200 for single individuals and $69,950 for married couples (one-half on a separate return) but left the phase-out thresholds unchanged. In addition, the Act extended the exception to discharge from indebtedness income on most acquisition debt related to a principal residence through 2012. In the University of Chicago Hospitals v. United States case, the Seventh Circuit Court of Appeals affirmed an Illinois Federal District Court decision, in accord with the Eleventh Circuit Court of Appeals, that medical residents may qualify for the student exception from social security tax. In Chief Counsel Advice...

• Attorney - CPA (Online), The
• Vol. 43 Nbr. 4, December 2008