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Full-Text Articles in Law
Bankruptcy Reform: What's Tax Got To Do With It, Michelle Arnopol Cecil
Bankruptcy Reform: What's Tax Got To Do With It, Michelle Arnopol Cecil
Missouri Law Review
On April 20, 2005, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), the most sweeping bankruptcy reform legislation passed by Congress in over a quarter of a century. The bill, which spanned over 600 pages, completelyoverhauled the consumer bankruptcy system and made significant changes to business bankruptcies as well. Yet despite Congress's massive effort to improve the current bankruptcy system in BAPCPA, it failed to address a number of important issues in the area of bankruptcy taxation, a critical but often overlooked area of bankruptcy law. One such issue involves the tax …
Bankruptcy Reform: What's Tax Got To Do With It?, Michelle A. Cecil
Bankruptcy Reform: What's Tax Got To Do With It?, Michelle A. Cecil
Faculty Publications
The article takes a two-pronged approach to the issue. First, it argues that all post-petition appreciation should be taxed to the debtor rather than to the debtor's bankruptcy estate because the debtor enjoys the benefits of the asset's appreciation in value and because, from a tax perspective, the results will be identical irrespective of whether the debtor or the bankruptcy estate is taxed on the asset's post-petition appreciation. Second, the article proposes that the gain accruing before the termination of the bankruptcy proceeding be treated as discharge of indebtedness income so that the debtor can defer recognition of the gain …