Minimizing Tax in Commercial Loan Workouts and Debt Modifications
Legal Strategies for Reducing Cancellation-of-Debt Income
Recording of a 90-minute premium CLE/CPE webinar with Q&A
This CLE course will prepare tax counsel to examine the income tax implications of loan workouts and modifications and the impact on the lender and borrower. The panel will outline best practices for managing the tax consequences associated with these transactions.
- Cancellation of indebtedness (COD) income
- Transfer of assets
- Stock-for-debt exchange
- Partnership-for-debt exchange
- Debt-for-debt exchange
- Related party debt acquisition
- Exclusion of COD income
- COD income from modification of debt instruments
- Specific modifications that trigger COD income
- Consequences to debtors, original lenders, subsequent holders
- Deferral of COD income under American Recovery and Reinvestment Act
- Deferral election under Section 108(i)
- Special rules for OID in certain debt reacquisitions
- Acceleration of deferred items
- Special rules for partnerships
The panel will review these and other key questions:
- How does COD income arise in various debt restructuring transactions?
- Under what circumstances can you exclude COD income and what are the consequences of this exclusion?
- What are best practices for minimizing the tax ramifications of COD income?
Joseph C. Mandarino
Stanley Esrey & Buckley
Mr. Mandarino's practice focuses on corporate, tax and finance. He has extensive experience in structuring M&A... | Read More
Mr. Mandarino's practice focuses on corporate, tax and finance. He has extensive experience in structuring M&A transactions, and is involved with a wide variety of businesses. He is a frequent writer and speaker on numerous business, tax and finance topics. Mr. Mandarino has published almost 100 articles in journals or in-house newsletters, and has participated in over 60 presentations or seminars.Close
Debevoise & Plimpton
He is a member of the firm’s Tax Department whose practice concentrates on domestic and cross-border mergers and... | Read More
He is a member of the firm’s Tax Department whose practice concentrates on domestic and cross-border mergers and acquisitions, bankruptcies and restructurings, and private equity fund formation. He is the co-author of the annual PLI outline entitled "Selected Federal Income Tax Issues in Corporate Debt Restructurings."Close
Debevoise & Plimpton
His practice focuses on tax planning in connection with private equity fund formation, M&A transactions and... | Read More
His practice focuses on tax planning in connection with private equity fund formation, M&A transactions and securities offerings. He represented Domtar in its merger with Weyerhaeuser's fine paper business and NBCU in its acquisition of Vivendi Universal Entertainment. He played major roles in the formation of many PE funds including Providence Equity Partners VI and Metalmark Capital Partners.Close