Worthless and passive losses

Article Abstract:

Worthlessness losses of partnership interest are considered sales or exchanges under Echols v Commissioner, allowing the taxpayer to recognize the remaining transaction loss and therefore should also free suspended passive losses. Securities that become worthless are considered sold and partnership interests could be considered securities, providing a basis for the release of passive losses. Only with passive losses can the taxpayers' full gain or loss be determined.

Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation), Passive activity (Taxation)

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The purchase of a mortgage loan at a discount (and the new proposed regulations)

Article Abstract:

Discount purchases of mortgage loans will be affected by new rules on debt modification. The IRS has proposed new regulations under IRC section 1001 covering changes of debt instruments which will be considered as exchanges. Any discount purchases should be restructured before the new rules come into effect, to avoid tax on a phantom profit.

Taxation, Mortgages, External debt relief, Debt relief, Real property tax, Real property taxes

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