Bankruptcy and Cancellation of Debt: Tax Issues

Overview

With the variability in the economy over the last several years, an increasing number of taxpayers are facing federal taxation issues related to cancelation of debt, foreclosures, and bankruptcies. Taxpayers do not always consider tax implications of canceled credit cards, repossessed cars, defaults on payday and business loans, and other situations often accompanying insolvency.

In this course, we will explore the world of alternative actions with respect to tax liabilities in such circumstances as foreclosures, canceled debt, and bankruptcy. The course will take the student through applicable rules and courses of action as well as provide a review of recent court cases.

Learning Objectives

Students who successfully complete this course will be able to:

  • identify bankruptcy benefits, drawbacks, issues, and the timing of other resolutions options outside bankruptcy
  • determine whether cancelation of Debt Income (CODI) rules apply
  • identify foreclosures and bankruptcy issues relating to CODI
  • recognize deemed sales and their implications
  • determine IRS payment options when tax liabilities cannot be paid in full by their due date

Designed for

CPAs and other tax advisors

Prerequisites

General understanding of federal taxation of the individual

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