Proposed regulations address income exclusion for certain real property business indebtedness

Article Abstract:

The Internal Revenue Service issued a series of proposed regulations under Sections 107 and 1017 in an attempt to clarify and establish the provisions of cancellation of indebtedness (COD) exclusions. Under the proposed rules, the amount excluded under the provision may not go beyond the remainder of the principal qualified debt amount. The rules also state that partnership COD income must be regarded as attributable to a discharge indebtedness incurred from the partnership interest. The proposed regulations, however, do not address several vital issues on COD income.

Tax Administration, Debt, Tax exclusion, United States. Internal Revenue Service

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Proposed regulations on basis allocation under subchapter K provide needed guidance

Article Abstract:

The recently issued Proposed Regulations by the US Department of Treasury on the sale or exchange of partnership interest is a more reasonable and simpler framework. The Proposed Regulations express the Treasury's attempt to conform the Regulations to Section 732(c), amended as a component of the Taxpayer Relief Act of 1997 (TRA '97). The TRA '97 amendments revise the method in which a distributee partner appropriates or the basis allocations rules on the pretext of fair market values.

Property Taxes, Allocation (Taxation), Tax allocation

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Washington Tax Watch - Proposed Regulations Address Income Exclusion for Certain Real Property Business Indebtedness

Article Abstract:

This paper explains how the proposed regulations of the IRS address the cancellation of indebtedness exclusion and use the amounts to reduce the bases of the taxpayers's share of partnership property that secured the discharged indebtedness.

United States, Extinguishment of debts, Debt cancellation, Real estate, Real property

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