Taxation and Accounting Issues With Debt Restructuring, Modifications and Bankruptcies
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Provides solutions to better anticipate the tax consequences related to the debt forgiveness or refinancing transactions.Businesses often begin to face financial difficulties, either due to a change in the status of an industry or unforeseen downturns in the business. These downturns often require a refinancing of existing debt in order to allow for adequate debt service. Having a firm understanding of the tax rules around debt forgiveness and bankruptcy allows clients and their advisors to better anticipate the consequences of these refinancing transactions and prepare for the impact. This topic provides tools to be able to identify the transactions which result in a debt modification for tax purposes, and provides solutions to better anticipate the tax consequences related to the debt forgiveness or refinancing transactions.
AuthorsNick Gruidl, RSM McGladrey Inc. Patrick Phillips, RSM McGladrey Inc.
Introduction - When Are the Tax Debt Modification Rules Relevant?
• Other Refinancing Transactions / Debt Modifications
The Impact of COD Income
• General Rules on Recognition
• Exclusions Available
• The Government Taketh Back - Attribute Reduction
• Nuances in Consolidation
• Sections 382(l)(5) and (l)(6) and the impact of the Proposed Section 38 Regulations