E-Alert
September 18 , 2009
IRS Issues Guidance of New Cancellation of Debt (COD) Rules
The The American Recovery and Reinvestment Act of 2009 provides that some taxpayers can elect to defer recognition of income that results from the cancellation of debt. The cancellation must occur after December 31, 2008 and before January 1, 2011.
New IRS guidance provides welcome information in the application of the cancellation of debt (COD) provision and method for making the election. The IRS has also indicated they will provide additional guidance in this area.
The new COD rules are very complex but can provide welcome relief for businesses.
If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.
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