Sect. 108 and Cancellation of Debt Income: Navigating IRS Rules

Deferring Tax Under This Complex Code Section and Under Latest Guidance

Recording of a 110-minute CPE/CLE webinar with Q&A


Conducted on Wednesday, April 20, 2011

Recorded event now available

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Program Materials

This teleconference will provide tax advisors and compliance professionals with an in-depth briefing on Sect. 108 and the most recent and highly relevant regulatory changes, guidance and rulings affecting COD income.

Description

As companies continue to struggle under debt loads as they emerge from the recession, tax specialists must stay familiar with Sect. 108 of the Internal Revenue Code, which deals with the exclusion from income for a variety of cancelled business debts.

The adoption of Sect. 108(i) on deferring COD income for certain business workouts, under the American Recovery and Reinvestment Act of 2009, was only one of the important developments in this area. For example, this past November brought temporary IRS Regs (T.D. 9497) on accelerated deferrals.

A briefing on the most impactful terms of Sect. 108 and related administrative guidance that also explores the toughest compliance scenarios for corporate taxpayers can prepare advisors for key decisions regarding income exclusions, treatment of credits and NOLs, OID discounts and other matters.

Listen as our panel of seasoned tax experts brings you up to speed on Sect. 108 compliance.

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Outline

  1. Sect. 108 overview
    1. Different impacts on different business structures
    2. Types of debts that can be canceled
    3. Implications for income exclusion, credits, NOLs, passive loss carryovers, OID discounts
  2. Review of classification of COD income from workouts under Sect. 108(i)
    1. Deferred benefit for reacquired debt instruments
    2. Situations in which it may be more prudent not to defer
    3. Rev. Proc. 2009-37
      1. Election procedures and partial elections
      2. Debt-by-debt elections
  3. Temporary regs, November 2010 (T.D. 9497)
    1. For C corporations:
      1. Acceleration of deferred COD income
      2. Acceleration of deferred OID deductions
      3. Calculations of earnings and profits under a Sect. 108(i) election
  4. Other material IRS interpretive guidance and rulings
    1. Outlook for future guidance
  5. Tax planning and compliance considerations
    1. Best practices for documenting election procedures
    2. Timing of cancellation of indebtedness
    3. Including COD income in federal returns

Benefits

The panel will explore these and other important areas:

  • How Sect. 108 generally affects C corporations, partnerships, LLCs and S corporations.
  • The aspects of Sect. 108(i) and Rev. Proc. 2009-37 that continue to demand taxpayers' attention.
  • The ramifications of the temporary regs on accelerating deferred COD income and OID deductions, and calculating earnings and profits under Sect. 108(i) election.
  • The IRS guidance documents and rulings in the area of Sect. 108 that require particular attention.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Davis Smith
Davis Smith

Shareholder
Kaufman Gilpin McKenzie Thomas Weiss

He works with business clients on tax strategies at all stages of the company life cycle and in a broad range of...  |  Read More

Robert Barnett
Robert Barnett

Member
Capell Barnett Matalon & Schoenfeld

His practice encompasses business and tax planning, estate planning and federal and state tax dispute resolution,...  |  Read More

Wayne Strasbaugh
Wayne Strasbaugh

Partner
Ballard Spahr

Mr. Strasbaugh is the Practice Leader of Ballard Spahr's Tax Group. His client work delves into preserving NOLs...  |  Read More

Annette Ahlers
Annette Ahlers

Partner
Pepper Hamilton

As part of the firm's Tax Practice Group, she works with large corporate clients on matters such as structuring tax...  |  Read More

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