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Bankruptcy and Insolvency Taxation, 4th Edition

Book Description

The thousands of mergers, acquisitions, and start-ups that have characterized the past years of business have created an increasing number of corporations in financial trouble: specifically, a shortage of venture capital or quick cash. Consequently, bankruptcy protection is now viewed as a strategic move to protect corporations from their creditors and allow them to reorganize. Fully revised and updated with new case studies and the latest coverage of regulations, Bankruptcy and Insolvency Taxation, Fourth Edition provides the answers to the questions financial managers will have on the tax aspects of bankruptcy strategy.

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Preface
  6. CHAPTER ONE: Nature of Bankruptcy and Insolvency Proceedings
    1. § 1.1 Objectives
    2. § 1.2 ALTERNATIVES AVAILABLE TO A FINANCIALLY TROUBLED BUSINESS
  7. CHAPTER TWO: Discharge of Indebtedness
    1. § 2.1 INTRODUCTION
    2. § 2.2 DISCHARGE OF INDEBTEDNESS INCOME
    3. § 2.3 DETERMINATION OF DISCHARGE OF INDEBTEDNESS INCOME
    4. § 2.4 SECTION 108(e) ADDITIONS TO DISCHARGE OF INDEBTEDNESS INCOME
    5. § 2.5 SECTION 108(e) SUBTRACTIONS FROM DISCHARGE OF INDEBTEDNESS INCOME
    6. § 2.6 DISCHARGE OF INDEBTEDNESS INCOME EXCLUSIONS
    7. § 2.7 CONSEQUENCES OF QUALIFYING FOR SECTION 108(a) EXCLUSIONS
    8. § 2.8 SECTION 108(i) DEFERRAL AND RATABLE INCLUSION OF DOI FROM BUSINESS INDEBTEDNESS DISCHARGED BY THE REACQUISITION OF A DEBT INSTRUMENT
    9. § 2.9 USE OF PROPERTY TO CANCEL DEBT
    10. § 2.10 CONSOLIDATED TAX RETURN TREATMENT
    11. § 2.11 DISCHARGE OF INDEBTEDNESS REPORTING REQUIREMENTS
  8. CHAPTER THREE: Partnerships and S Corporations
    1. § 3.1 INTRODUCTION
    2. § 3.2 PARTNERSHIPS
    3. § 3.3 S CORPORATIONS
  9. CHAPTER FOUR: Taxation of Bankruptcy Estates and Debtors
    1. § 4.1 INTRODUCTION
    2. § 4.2 RESPONSIBILITY FOR FILING INCOME TAX RETURNS
    3. § 4.3 ACCOUNTING FOR THE BANKRUPTCY ESTATE
    4. § 4.4 ACCOUNTING FOR THE DEBTOR (INDIVIDUAL)
    5. § 4.5 SUMMARY
  10. CHAPTER FIVE: Corporate Reorganizations
    1. § 5.1 INTRODUCTION
    2. § 5.2 ELEMENTS COMMON TO MANY REORGANIZATION PROVISIONS
    3. § 5.3 OVERVIEW OF SPECIFIC TAX-FREE REORGANIZATIONS UNDER SECTION 368
    4. § 5.4 ACQUISITIVE ASSET REORGANIZATIONS
    5. § 5.5 STOCK ACQUISITIONS
    6. § 5.6 SINGLE-ENTITY REORGANIZATIONS
    7. § 5.7 DIVISIVE REORGANIZATIONS
    8. § 5.8 INSOLVENCY REORGANIZATIONS
    9. § 5.9 SUMMARY
  11. CHAPTER SIX: Use of Net Operating Losses
    1. § 6.1 INTRODUCTION
    2. § 6.2 I.R.C. SECTION 381
    3. § 6.3 RESTRUCTURING UNDER PRIOR I.R.C. SECTION 382
    4. § 6.4 CURRENT I.R.C. SECTION 382
    5. § 6.5 I.R.C. SECTION 383: CARRYOVERS OTHER THAN NET OPERATING LOSSES
    6. § 6.6 I.R.C. SECTION 384
    7. § 6.7 I.R.C. SECTION 269: TRANSACTIONS TO EVADE OR AVOID TAX
    8. § 6.8 LIBSON SHOPS DOCTRINE
    9. § 6.9 CONSOLIDATED RETURN REGULATIONS
  12. CHAPTER SEVEN: Other Corporate Issues
    1. § 7.1 INTRODUCTION
    2. § 7.2 EARNINGS AND PROFITS
    3. § 7.3 INCORPORATION
    4. § 7.4 LIQUIDATION
    5. § 7.5 I.R.C. SECTION 338
    6. § 7.6 LIMITED LIABILITY CORPORATION
    7. § 7.7 OTHER TAX CONSIDERATIONS
    8. § 7.8 ADMINISTRATIVE EXPENSES
    9. § 7.9 OTHER ADMINISTRATIVE ISSUES
  13. CHAPTER EIGHT: State and Local Taxes
    1. § 8.1 INTRODUCTION
    2. § 8.2 BANKRUPTCY ESTATES
    3. § 8.3 STOCK FOR DEBT
    4. § 8.4 CANCELLATION OF INDEBTEDNESS
    5. § 8.5 NET OPERATING LOSS CARRYBACK AND CARRYOVER
    6. § 8.6 STAMP TAX
    7. § 8.7 TAX IMPACT OF PLAN FOR STATE AND LOCAL PURPOSES
  14. CHAPTER NINE: Tax Consequences to Creditors of Loss from Debt Forgiveness
    1. § 9.1 INTRODUCTION
    2. § 9.2 NATURE OF LOSSES
    3. § 9.3 BUSINESS AND NONBUSINESS LOSSES
    4. § 9.4 DETERMINATION OF WORTHLESSNESS
    5. § 9.5 SECURED DEBT
    6. § 9.6 REORGANIZATION
  15. CHAPTER TEN: Tax Procedures and Litigation
    1. § 10.1 INTRODUCTION
    2. § 10.2 NOTICE AND FILING REQUIREMENTS
    3. § 10.3 TAX DETERMINATION
    4. § 10.4 BANKRUPTCY COURTS
    5. § 10.5 MINIMIZATION OF TAX AND RELATED PAYMENTS
  16. CHAPTER ELEVEN: Tax Priorities and Discharge
    1. § 11.1 INTRODUCTION
    2. § 11.2 PRIORITIES
    3. § 11.3 TAX DISCHARGE
  17. CHAPTER TWELVE: Tax Preferences and Liens
    1. § 12.1 INTRODUCTION
    2. § 12.2 TAX PREFERENCES
    3. § 12.3 TAX LIENS
  18. About the Authors
  19. About the Web Site
  20. Statutes Citations
  21. Treasury Regulations, Revenue Procedures, and Revenue Rulings Citations
  22. Case Index
  23. Subject Index
  24. Appendix A: Internal Revenue Code: Selected Sections
    1. SEC. 108. INCOME FROM DISCHARGE OF INDEBTEDNESS
    2. SEC. 312. EFFECT ON EARNINGS AND PROFITS
    3. SEC. 331. GAIN OR LOSS TO SHAREHOLDERS IN CORPORATE LIQUIDATIONS
    4. SEC. 332. COMPLETE LIQUIDATIONS OF SUBSIDIARIES
    5. SEC. 336. GAIN OR LOSS RECOGNIZED ON PROPERTY DISTRIBUTED IN COMPLETE LIQUIDATION
    6. SEC. 337. NONRECOGNITION FOR PROPERTY DISTRIBUTED TO PARENT IN COMPLETE LIQUIDATION OF SUBSIDIARY
    7. SEC. 338. CERTAIN STOCK PURCHASES TREATED AS ASSET ACQUISITIONS
    8. SEC. 351. TRANSFER TO CORPORATION CONTROLLED BY TRANSFEROR
    9. SEC. 354. EXCHANGES OF STOCK AND SECURITIES IN CERTAIN REORGANIZATIONS
    10. SEC. 355. DISTRIBUTION OF STOCK AND SECURITIES OF A CONTROLLED CORPORATION
    11. SEC. 356. RECEIPT OF ADDITIONAL CONSIDERATION
    12. SEC. 357. ASSUMPTION OF LIABILITY
    13. SEC. 358. BASIS TO DISTRIBUTEES
    14. SEC. 361. NONRECOGNITION OF GAIN OR LOSS TO CORPORATIONS; TREATMENT OF DISTRIBUTIONS
    15. SEC. 368. DEFINITIONS RELATING TO CORPORATE REORGANIZATIONS
    16. SEC. 381. CARRYOVERS IN CERTAIN CORPORATE ACQUISITIONS
    17. SEC. 382. LIMITATION ON NET OPERATING LOSS CARRYFORWARDS AND CERTAIN BUILT-IN LOSSES FOLLOWING OWNERSHIP CHANGE
    18. SEC. 383. SPECIAL LIMITATIONS ON CERTAIN EXCESS CREDITS, ETC
    19. SEC. 384. LIMITATION ON USE OF PREACQUISITION LOSSES TO OFFSET BUILT-IN GAINS
    20. SEC. 1017. DISCHARGE OF INDEBTEDNESS
    21. SEC. 1398. RULES RELATING TO INDIVIDUALS’ TITLE 11 CASES
    22. SEC. 1399. NO SEPARATE TAXABLE ENTITIES FOR PARTNERSHIPS, CORPORATIONS, ETC.
    23. SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION
  25. Appendix B: Senate Report No. 96-1035 on H.R. 5043—Bankruptcy Tax Act of 1980
    1. BANKRUPTCY TAX ACT OF 1980
    2. I. SUMMARY
    3. II. EXPLANATION OF THE BILL
    4. III. EFFECT OF THE BILL ON THE BUDGET AND VOTE OF THE COMMITTEE IN REPORTING THE BILL AS AMENDED
    5. IV. REGULATORY IMPACT OF THE BILL
    6. V. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
  26. Appendix C: Senate Proposed Amendments to H.R. 5043 (Bankruptcy Tax Act of 1980) Adopted by Both Senate and House
    1. BANKRUPTCY TAX ACT OF 1980
    2. SEC. 7. EFFECTIVE DATES
    3. SECTION 2 (TAX TREATMENT OF DISCHARGE OF INDEBTEDNESS)
    4. SECTION 3 (RULES RELATING TO TITLE CASES FOR INDIVIDUALS)
    5. SECTION 5 (MISCELLANEOUS CORPORATE AMENDMENTS)
    6. PROVIDING CERTAINTY IN THE TAX LAWS
    7. FINANCE COMMITTEE PRO-DEBTOR AMENDMENT
    8. TIME FOR FINE TUNING NEXT YEAR
  27. Appendix D: Representative Ullman’s Statement Regarding Bankruptcy Tax Legislation
    1. REQUEST TO CONCUR IN SENATE AMENDMENTS TO H.R. 5043, BANKRUPTCY TAX ACT OF 1980
    2. SEC. 7. EFFECTIVE DATES
    3. BANKRUPTCY TAX ACT OF 1980
    4. SEC. 7. EFFECTIVE DATES
    5. “STOCK-FOR-DEBT” RULES
    6. EFFECTIVE DATE PROVISIONS
    7. TECHNICAL AMENDMENTS
    8. SECTION 2.’TAX TREATMENT OF DISCHARGE OF INDEBTEDNESS
    9. SECTION 3.’RULES RELATING TO TITLE 11 CASES FOR INDIVIDUALS
    10. SECTION 5.’MISCELLANEOUS CORPORATE AMENDMENTS
    11. GENERAL LEAVE
  28. Appendix E: Selected Provisions from the General Explanation of the Tax Reform Act of 1986
    1. DISCHARGE OF INDEBTEDNESS INCOME FOR CERTAIN FARMERS (SEC. 405 OF THE ACT AND SECS. 108 AND 1017 OF THE CODE)
    2. SPECIAL LIMITATIONS ON NET OPERATING LOSS AND OTHER CARRYFORWARDS (SEC. 621 OF THE ACT AND SECS. 382 AND 383 OF THE CODE)
    3. RECOGNITION OF GAIN OR LOSS ON LIQUIDATING SALES AND DISTRIBUTIONS OF PROPERTY (GENERAL UTILITIES) (SECS. 631, 632, AND 633 OF THE ACT AND SECS. 336, 337, AND 1374 OF THE CODE)3
    4. CANCELLATION OF INDEBTEDNESS FOR SOLVENT TAXPAYERS (SEC. 822 OF THE ACT AND SEC. 108 OF THE CODE)
  29. Appendix F: Selected Provisions from the Explanation of the Technical and Miscellaneous Revenue Act of 1988
    1. HOUSE WAYS AND MEANS COMMITTEE REPORT NO. 100-795, JULY 26, 1988 (“HOUSE COMMITTEE REPORT”)
    2. SENATE FINANCE COMMITTEE REPORT NO. 100-445, AUGUST 3, 1988 (“SENATE COMMITTEE REPORT”)
    3. JOINT COMMITTEE ON TAXATION EXPLANATION OF SENATE CONSENSUS AMENDMENT, JCX-28-88, SEPTEMBER 12, 1988
    4. CONFERENCE COMMITTEE REPORT, STATEMENT OF THE MANAGERS, OCTOBER 24, 1988 (“CONFERENCE COMMITTEE REPORT”)
    5. ACT § 1006 AND FRC § 336, 368, AND 382 SENATE COMMITTEE REPORT
    6. SPECIAL LIMITATIONS ON NET OPERATING LOSS AND OTHER CARRYFORWARDS
    7. RECOGNITION OF GAIN OR LOSS ON LIQUIDATING SALES AND DISTRIBUTIONS OF PROPERTY (GENERAL UTILITIES)
    8. JOINT COMMITTEE EXPLANATION OF SENATE CONSENSUS AMENDMENT
    9. HOUSE COMMITTEE REPORT
    10. CONFERENCE COMMITTEE REPORT
    11. ACT SEC. 4012 AND IRC § 382: FINANCIAL INSTITUTIONS
    12. ACT SEC. 1004 AND IRC § 108(G): TREATMENT OF DISCHARGE OF INDEBTEDNESS INCOME OF CERTAIN FARMERS
    13. ACT SEC. 1018(D)(5) AND IRC § 361: EARNINGS AND PROFITS
  30. Appendix G: In re Fremont General Corporation: Tax Consequences of Plan
    1. F. TAX CONSEQUENCES OF PLAN