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90-minute live streaming program
  • December 15
  • 1:00 - 2:30 pm EST

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OnDemand Course
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Fundamentals of Federal Income Taxation for Financially Troubled Corporations, Partnerships and S Corporations

December 15

Learn federal income rules that drive tax consequences of modifying the debt component of a corporate capital structure in bankruptcy or out of court.

In light of the COVID-19 epidemic and its impact on the local and global economies, many corporations will be re-examining their capital structures to better reflect the current business environment and financial realities. In some situations, debtors will determine that their financing arrangements are not aligned with their changed business situation. To reduce the cash drain of interest and principal payments, many corporate debtors will be looking to modify the terms of debt, replace debt with equity or reduce the amount of debt owed in an out of court process or in a bankruptcy case. While a troubled company may not always be able to optimize its debt restructuring due to lender demands, undertaking a debt workout without properly addressing the tax considerations may result in significant cash tax leakage post restructuring. Even if they cannot alter the terms of the debt workout, debtors should still understand the tax consequences of their actions so that they can fully understand the after-tax costs and benefits of modifying their debt structure. We will consider what is cancellation of debt income (CODI) and when is CODI realized? When is realized CODI not included in gross income? How is the deferral of income recognition achieved under the Internal Revenue Code? What are the special rules for consolidated return groups, S-corporations and partnerships?

Learning Objectives

  • You will be able to define cancellation of debt income.
  • You will be able to describe the basic federal tax treatment of cancellation of debt income.
  • You will be able to recognize the federal tax implications of modifying the terms of a debt instrument.
  • You will be able to discuss the federal tax rules that apply to cancellation of debt income in a group of corporations filing a consolidated return.

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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Cancellation of Debt Income (CODI)
  • What Is CODI?
  • When Is CODI Realized?
  • Is CODI Taxable?
Recourse and Non-Recourse Debt
  • What Is the Difference Between Recourse and Non-Recourse Debt?
  • What Are the Differences in the Tax Treatment of Recourse and Non-Recourse Debt?
  • What Is the Significance of the Distinction Between Recourse and Non-Recourse Debt for Financially Troubled Companies?
Basic Corporate Rules for Tax Treatment of CODI
  • What Are the Basic Rules of Sections 108(a) and (b)?
  • What Are the Rules of Section 1017?
  • What Tax Policy Is Implemented by These Rules?
  • What Are the Rules of Section 108(e)?
Application of Sections 108 and 1017 to Groups of Corporations Filing Consolidated Returns
  • What Is the Policy of Section 1.1502-28?
  • What Are the Operative Steps in Section 1.1502-28?
  • When Is Intercompany Debt Important?
Sections 382(l)(5) and (l)(6)
  • What Is Section 382 in General?
  • How Do Sections 382(l)(5) and (l)(6) Modify the General Rule?
  • What Are the Benefits and Detriments of Section 382(l)(5)?
CODI and Partnerships and S Corporations
  • How Does Section 108 Apply to Partnerships?
  • How Does Section 108 Apply to S Corporations?
Section 1.1001-3 and Modification of Debt Terms
  • What Is a Modification?
  • What Is a Significant Modification?
  • What Are the Tax Consequences of a Significant Modification?
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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on December 20, 2019.

Call 1-866-352-9540 for further credit information.

No Credit Available

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • ME CLE 1.5
     
  • MT CLE 1.5
     
  • NJ CLE 1.8
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 1.8
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

Live Webinar Registration

  • AIPB 1.5
     
  • This program is acceptable for 1.5 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
     
  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • Arizona CLE 1.5
     
  • The State Bar of Arizona does not approve or accredit CLE activities for the Mandatory Continuing Legal Education requirement. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • HI CLE 1.5
     
  • This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • ME CLE 1.5
     
  • This course has been approved by the State of Maine Board of Overseers of the Bar. Lawyers who complete this course shall receive 1.5 hours of CLE credit under M. Bar R. 12.
     
  • NH MCLE 1.5
     
  • NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 90 Minutes.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • VT CLE 1.5
     
  • This program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hours of CLE credit.
     
  • WI CLE 1.5
     
  • This program has been approved by the Board of Bar Examiners for 1.5 hours for use toward the Wisconsin Mandatory CLE requirement.
     
  • Enrolled Agents 1.0
     
  • This program qualifies for 1.0 hours of Continuing Education Credit for enrolled agents under Treasury Department Circular #230 Section 10.6(g).
     
  • CPE 1.8 including Taxes 1.8
     
  • Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: https://www.nasbaregistry.org/cpas/complaints. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 1.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Taxes for 1.8 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: Group Internet Based. Please refer to the information in this brochure for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board. Please note: In order to receive CPE credit for this course you MUST use the streaming audio option, as well as enable and complete the required progress checks.
     

Who should attend?

This live webinar is designed for accountants, tax managers, CFOs, controllers, business managers and owners, presidents, vice presidents, CEOs, financial analysts, risk managers, operations managers, bookkeepers, auditors, consultants, enrolled agents and attorneys.

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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Richard D. Liebman

Richard D. Liebman

BDO USA, LLP

  • Managing Director, BDO USA, LLP National Tax Office – Corporate Tax
  • Practice focus: Federal corporate income tax including the taxation of bankruptcy and out-of-court debt workout transactions
  • Retired Big 4 tax partner who has continued to practice with top-tier firms in the professional services industry
  • Led tax planning engagements in bankruptcy cases and out-of-court debt workouts
  • Industry experience includes: automotive, oil exploration and production, oil field services, aviation, retail distribution, technology, hospitality, and manufacturing
  • Prior teaching experience includes serving as an Adjunct Professor of Law at Chicago-Kent College of Law where he taught the Consolidated Federal Income Tax Return course in the LL.M. in Taxation program
  • Speaking engagements include presentations to the American Bankruptcy Institute, Turnaround Management Association, Tax Executives Institute, and Practicing Law Institute
  • Member of the American Institute of Certified Public Accountants, American Bankruptcy Institute and Turnaround Management Association
  • J.D. degree, with honors, Northwestern University School of Law; B.S. degree in business and economics, Illinois Institute of Technology
  • Can be contacted at [email protected]
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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 408025
Published 2019, 2020
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