DESCRIPTION
This module addresses the various types of cancellation of debt income. The material focuses on exceptions to taxability of the income and reviews the many different scenarios. The concepts are reviewed and are reinforced via examples and exercises.
LEARNING OBJECTIVES
- Define Cancellation of Debt and related COD income.
- Identify the taxability of different types of foreclosures and calculate the gain or loss from the disposition of the property.
- Discuss the status of primary mortgage forgiveness.
- (Optional) Discuss the effect of attribute reductions, recapture, debt modifications, and related parties.
- (Optional) Explore the tax consequences of debt-to-equity conversion and allocations of cancellation of debt to partnerships.
