Title

Renegotiated Debt: The Search for Standards

Publication Title

Tax Lawyer

Document Type

Article

Publication Date

1-1-1991

Abstract

This article examines, from the creditor’s standpoint, four basic tax issues that must be resolved to properly report the tax effect of debt renegotiation: first, the circumstances under which a debt renegotiation is properly classified as a taxable exchange under section 1001; second, the appropriate rules for determining the amount of the gain or loss resulting from the transaction, if a taxable exchange has occurred; third, whether any realized loss is recognized under section 1001(c) and deductible under some provision of the Code, most likely under sections 165 or 166; and finally, how to deal with the fact that the statute has been misapplied in Revenue Ruling 89-122 and in the recent opinions of two circuit courts. Further, this paper will argue that the statute has been encumbered by a formalistic rule recently elevated in the Supreme Court opinion in Cottage Savings Association v. Commissioner.

Comments

External Links
Westlaw
Lexis Advance
HeinOnline
SSRN

Recommended Citation

Harold L. Adrion & Ronald W. Blasi, Renegotiated Debt: The Search for Standards, 44 Tax Law. 967 (1991).

Volume

44

Issue

4

First Page

967

Last Page

1036

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