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Full-Text Articles in Taxation-Federal
Cancellation-Of-Indebtedness Income And Transactional Accounting, Lawrence A. Zelenak
Cancellation-Of-Indebtedness Income And Transactional Accounting, Lawrence A. Zelenak
Faculty Scholarship
More than three-quarters of a century after the Supreme Court’s decision in United States v. Kirby Lumber established that the cancellation of a debt produces taxable income, there is still uncertainty - both in the courts and among commentators - concerning the rationale for the taxation of cancellation-of-debt (COD) income. Is the taxation of COD income based on the simple fact that the cancellation of a debt improves the taxpayer’s balance sheet, thus increasing the taxpayer’s net worth in the year of cancellation? Or is it based on a multi-year perspective, in which inclusion of the cancelled debt in income …
The Tax Implications Of Corporate Insolvency Under The Bankruptcy Tax Act Of 1980, Douglas Robison
The Tax Implications Of Corporate Insolvency Under The Bankruptcy Tax Act Of 1980, Douglas Robison
Duquesne Law Review
This issue's lead article is concerned with the provisions of the recent Bankruptcy Tax Act which affect insolvent corporate debtors. The author provides a detailed examination of how the Act interfaces with the Internal Revenue Code and discusses how the Code has been modified. He concludes that, although it is a product of compromise and thus may be faulted for some of its provisions, the Act should be welcomed by tax and bankruptcy practitioners.