An Introduction to the Tax Impact of Cancellation of ...
Section 61(a)(12) provides that gross income includes income from the discharge of indebtedness. In general, COD will result in income to the debtor equal to the amount of debt canceled. However, if the debtor is insolvent or in bankruptcy, it may exclude the COD income under section 108. See also Reg. ยงย 1.61-12(a); United States v. ................
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