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Debt Cancellation/Modification Poses Major Tax Consequences for U.S. Companies, Say BNA Experts

September 27, 2010

ARLINGTON, Va., Sept. 27 /PRNewswire-USNewswire/ — At a time in the U.S. when many companies are renegotiating debt, it is imperative that tax practitioners understand the tax ramifications and strategies associated with the cancellation or reduction of debt. For an S corporation, its shareholders, and those who represent S corporations, several significant tax provisions impact the results of a debt discharge or debt modification. BNA’s Understanding S Corporation Cancellation of Debt Income, Deferral, and Exclusions webinar, led by tax expert Lewis Taub of McGladrey, New York City, will explore those provisions in detail on September 28, 2010.

Taub will address these provisions with emphasis on Section 108(i) and the recently published temporary and proposed regulations. The recently published regulations answer several questions concerning the impact of Section 108(i) on S corporations and their shareholders, particularly with respect to events that accelerate recognition of the deferred income. The webinar will also summarize the Section 108(a) and (b) statutory exclusions and attribute reduction and their effect on shareholder basis, and will discuss the issues and decisions that must be made in order to arrive at the best tax treatment of an S corporation’s cancellation of debt income.

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“S corporations and other taxpayers have just three more months to take advantage of section 108(i) in restructuring debt. For those S corporations that have already made the Section 108(i) election, an understanding of the temporary regulations covered in this webinar is crucial to avoiding acceleration events over the next four years and, thus, preserving the tax benefits of the election,” says BNA Tax & Accounting senior tax analyst and Managing Editor Allen Calhoun.

This 60-90 presentation will cover timely topics concerning debt forgiveness of an S corporation, including:

  • What constitutes a debt discharge?
  • What are the choices available for an S corporation in dealing with debt discharge? What are the risks involved?
  • Explanation of the rules (including the new regulations) with regard to electing the deferral of income resulting from the discharge of debt under Section 108(i)
  • Events resulting in acceleration of the deferred income
  • Determination of when debt instruments are issued in connection with a trade or business
  • Impact of deferral on shareholder’s basis in the S corporation
  • Consideration of when it might not be advantageous to defer the income
  • Explanation of the statutory exclusions of cancellation of debt income and their effect on S corporation shareholders

About the Speaker

Lewis Taub is a Director in the closely-held client group of McGladrey’s New York office. He has over 25 years of experience advising clients on tax matters. His practice focuses on corporate and partnership tax matters for commercial clients, where he provides compliance and planning services for both businesses and their owners. Lewis serves private, multistate, and multinational clients in such industries as apparel, technology, design, furniture, investments, and distribution.

Lewis is a member of McGladrey’s flow-through specialty group, which deals with issues for S corporations and partnerships. He also developed and led many seminars on tax updates for S corporations. Lewis is a member of the S Corporation technical panel of the AICPA. He has taught CPE courses for many different groups including a corporate tax planning course throughout the country for the American Management Association. Last month, Lewis authored articles which appeared in two major tax publications on tax planning opportunities for growing businesses.

Prior to joining the firm, Lewis had his own CPA practice specializing in planning and compliance for multinational and multi-state corporations and for high net worth individuals. He represented clients before the Internal Revenue Service and state and local tax authorities. Lewis often served as a technical consultant to other accountants on complex tax matters.

Understanding S Corporation Cancellation of Debt Income, Deferral, and Exclusions place September 28, 2010, from 12:30 – 2:00 pm, ET). Register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bnatax.com/forgiveness-debt-s-corporation-webinar/?open&cmpid=tmtxac2010 or call 1-800-372-1033, menu Option 6, then Option 1. The fee is $249 for BNA subscribers, $299 for nonsubscribers.

To receive automatic, email notification of upcoming BNA webinars that may be of interest to you, go to: http://www.bna.com/emailsignup.htm

About BNA Tax & Accounting Webinars

BNA Tax & Accounting is the foremost source of tax and accounting research, news, practice tools, and guidance for tax attorneys, CPAs, corporate tax managers, estate planners, and financial accountants. Designed for today’s busy practitioners, our webinars offer the same expertise and relevance that are the hallmark of all BNA Tax & Accounting resources. In just 60-90 minutes, practitioners gain in-depth knowledge on a current tax or accounting topic from experts in that area — and benefit from practical applications that can be put to work immediately. Conference attendees have the opportunity to ask the speakers questions, and may be eligible to earn CLE or CPE credits — all from the convenience of their own office or conference room.

SOURCE BNA Tax & Accounting


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